Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 7)
[2016] FCA 246
•4 February 2016
FEDERAL COURT OF AUSTRALIA
Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 7) [2016] FCA 246
File number: NSD 1490 of 2011 Judge: FOSTER J Date of judgment: 4 February 2016 Legislation: Federal Court Rules 2011, r 14.25 Cases cited: Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 5) (2014) 318 ALR 85 Date of hearing: 4 February 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: International Commercial Arbitration Category: No Catchwords Number of paragraphs: 10 Solicitor for the Applicant: Mr T Grave of Clifford Chance Solicitor for Respondents: The respondents did not appear Solicitor for the Applicants on the Interlocutory Application (Andrew Cummins and Brian Silvia in their capacity as receivers and managers): Mr T Sperber of Swaab Attorneys ORDERS
NSD 1490 of 2011 BETWEEN: TRAXYS EUROPE SA
Applicant
AND: BALAJI COKE INDUSTRY PVT LTD
First Respondent
BOOYAN COAL PTY LIMITED (ACN 115 420 598)
Second Respondent
CONCAST EXIM LTD
Third Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
4 FEBRUARY 2016
THE COURT ORDERS THAT:
1.Andrew Cummins and Brian Silvia of BRI Ferrier (NSW) Pty Ltd (Receivers) be discharged as receivers and managers of the shares held by the first respondent, Balaji Coke Industry Pvt Ltd, in the second respondent, Booyan Coal Pty Limited (ACN 115 420 598).
2.The Receivers’ obligation to file accounts with the Court under r 14.25 of the Federal Court Rules 2011 be dispensed with.
3.The guarantee dated 1 October 2014 provided to the Court by the Receivers be discharged forthwith and, if appropriate, returned to the Receivers.
4.There be no orders as to the costs of the Interlocutory Application filed by the Receivers on 25 September 2015.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
FOSTER J:
On 9 September 2014, I delivered reasons for judgment dealing with the remaining issues in this proceeding (Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 5) (2014) 318 ALR 85). I had earlier made orders enforcing the foreign award which the applicant had obtained against the first respondent (Balaji) and the issues with which I dealt in the judgment of 9 September 2014 concerned enforcement of the consequential judgment which I had ordered.
The applicant had claimed that I should enforce the judgment by the appointment of receivers of the shares held by Balaji in the second respondent (Booyan), amongst other things, and the respondents had resisted that application upon the basis that the shares held by Balaji in Booyan had been sold to the third respondent (Concast) pursuant to a contract entered into before I had made freezing orders against Balaji.
On 26 September 2014, I made orders giving effect to the reasons for judgment which I had published on 9 September 2014. The substance of those orders was that Messrs Andrew Cummins and Brian Silvia of BRI Ferrier (NSW) Pty Ltd were appointed receivers of the shares held by Balaji in Booyan and given extensive powers to sell those shares in aid of enforcing the judgment which I had ordered against Balaji.
Thereafter, the receivers diligently pursued their duties in an endeavour to sell the relevant shares and to realise the proceeds for the benefit of the applicant. Unfortunately, despite the receivers’ earnest and diligent efforts, no purchaser for the relevant shares has been able to be secured.
By Interlocutory Application filed on 25 September 2015, the receivers applied to the Court for orders discharging them from their duties, for an order dispensing with their obligation to file accounts and for the discharge of the guarantee provided by them to the Court on 1 October 2014. In support of that Interlocutory Application, the receivers rely upon an affidavit sworn on 2 September 2015 by Andrew Cummins, who is one of the receivers, and a report made to the Court by the receivers dated 23 April 2015. They also rely upon a number of affidavits of service which establish that all parties to the litigation have been notified of the receivers’ Application. In that regard, only the applicant has appeared this morning. The respondents were called outside the courtroom when the matter was called on, but there was no appearance either by or on behalf of any of the respondents.
The evidence adduced by the receivers was to the following effect:
(a)The directors of Balaji and Booyan did not provide the receivers with any books and records of either of those corporations. Some information and documents were obtained from local agents for those parties and from various Australian mining departments and registers. The financial records which were obtained did not satisfactorily or convincingly establish the value of the shares held by Balaji in Booyan.
(b)For a time, Booyan was the registered owner of a mining tenement, EPC969, located in the Maryborough basin in Queensland. That tenement appears to have been the only asset of any potential value held by Booyan. It was granted in 2005 and acquired by Booyan in 2007. The capitalised value of the tenement in Booyan’s financial statements for the year ended 30 June 2012 was $432,000. However, the licence term expired in August 2015. The effect of the expiration of the licence term was to destroy the value of the tenement.
(c)A number of documents tendered in the proceeding before me had suggested that the tenement had had very substantial value. However, upon closer scrutiny the receivers formed the view that these documents substantially exaggerated the position.
(d)Notwithstanding these difficulties, in the period between the date of their appointment and mid 2015 the receivers took all reasonable steps to sell the shares and, in the latter part of that period, the tenement itself. Notwithstanding these efforts, no sale of either the shares or the tenement could be secured.
(e)The receivers have incurred substantial costs in carrying out the receivership for which they will receive no payment.
The evidence tendered before me in support of the present Application makes clear that there is no utility in the receivers continuing to be receivers of the shares. The shares appear to have no value now and the underlying asset, the mining tenement, no longer exists. There is no suggestion that Booyan has any other assets of any value.
The receivers should not be vexed with having to continue the receivership in those circumstances and should be relieved of their obligations to the Court.
For all of the above reasons, I propose to make the orders sought in the Interlocutory Application substantially along the lines of the orders which I outlined at [5] above.
There will be orders accordingly.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate:
Dated: 14 March 2016
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