Ulan Coal Mines Ltd v Dawkins, D.S.F

[1993] FCA 1003

JUDGMENT No. ........ ........ .. ........ .. . 1003 43

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WAL-ES DISTRICT REGISTRY ) No. NG942 of 1993

)

GENERAL DIVISION )

BETWEEN:  ULAN COAL MINES LIMITEJ

Applicant

AND :  DONALD STEWART FAROUHARSON
DAWKINS

First Respondent

REX ROWE

Second Respondent

DON DAWKINS & ASSOCIATES PTY

LIMITED

Third Respondent

- NOEMA GRAHAM ROWE

Fourth Respondent

R & N ROWE & ASSOCIATESPTY

Fifth Respondent

9 December, 1993

,.I

REASONS FOR JUDGMENT

LOCKHART J.

The Court is today hearing two motions: a motion for further extension of mareva injunctions, which have previously been granted, and a motion for certain additional orders to which I shall refer in a moment.

The relevant orders all flow from the notice of motion which was filed by the applicant in this matter on 3 December 1993. On that date, the Court made orders which are customarily known as mareva injunctions against the respondents to the proceeding.	until 5.00 pm tomorrow. The purpose of today's hearing is to	Those orders operated until yesterday but were extended yesterday
determine what should happen with these matters until some later date which in my view for reasons of convenience would have to be regarded as the final hearing of the proceeding. Whatever is done today should operate until the final hearing subject, of course, to further order, if any party wishes to bring it back for variation or release or some form of modification.
I shall deal in ascending order of importance with the matters which have been the subject of dispute.
First, order number 1 which was made on 3 December, is an order restraining the respondents until tomorrow from dealing with and issuing instructions concerning dealings with accounts or investments with banks or financial institutions held in various names that are specified in the order, otherwise than in the payment of just debts in the ordinary course of business.
Counsel and solicitors for the respondents do not take they seek modification. I do not propose to formulate the exception in principle to the continuation of such an order, but
precise terms of the modifications that I think are appropriate, but I shall indicate them in principle so that the parties can
then, through their legal advisers, discuss them and bring in appropriate short minutes, at a convenient time, which probably would be tomorrow.
The customary exceptions to an order such as order 1 is to accept moneys to meet ordinary and reasonable living expenses of respondents being personal respondents, and the payment of just debts in the ordinary course of business. In my view, it is proper for respondents being corporate respondents, as well as reasonable legal expenses to allow those three exceptions to the scope of order 1. The order that should subsist until the hearlng of the proceeding or further order should accommodate those three exceptions.
Order 2 exempts from its operation by way of a formula which is built into order 2 and is reflected in paragraph 3 of the
orders made by the Court on 3 December, those three classes of expense to which I have referred. Order 2 should in my view continue until the hearing of the proceeding or further order but, similarly to order 1, should have built into it the three exceptions to which I have referred.
There is debate about what is described in the notice of motion of 3 December as order number 4. That is an order that requires each of the respondents to file and serve on the applicant by a particular time, which can be agreed later, statlng amongst other things all bank accounts held by the particular respondent or in respect of which the respondent has a beneficial interest identifying various particulars with respect to the name of the bank and details of the account and stating, in effect, full details of all their respective assets.
There is no oblection in principle by the respondents, provided the time for filing the affidavits is a reasonable time, except so much of the paragraph in the notice of motion numbered
4 as asks for the affidavit to specify bank accounts held by a
parti.cular respondent, which is under that respondent 'S control. It is submitted that that goes too far, that the expression is susceptible of a variety of meanings and that an affidavit of this kind, because of the consequences that flow from its being incorrect, requires full precision and lack of ambiguity.
In my view, it is appropriate to extend the affidavit that is requested to bank accounts and assets which are under the control of a particular respondent. Judgments will have to be made by the deponent, no doubt on legal advice, as to what that concept embraces, but it is a well understood concept in this and related branches of the law, including the law of discovery and the law of subpoenas or summonses to produce documents. The order should embrace that concept of control.
The main debate took place on what is sought in paragraph 5 of the notice of motion of 3 December. I will not attempt to paraphrase the paragraph except to say that it seeks to require each of the relevant respondents, who are the first, second and third respondents, to file and serve an affidavit setting out full particulars of certain commissions or other amounts paid to the respondents in connection with the sale of or negotiation for the sale of coal on behalf of the applicant and certain other related matters essentially during the course of the first and second respondents' employment by the applicant or the third respondent's consultancy with the applicant.
The order is sought to be justified on a variety of grounds that have been the subject of full argument and I need not rehearse that argument in any detail, except to say that I am satisfied that it is appropriate to make an order of that general kind - I will come to the specific terms of it in a moment - in a case of this klnd in view of the outline of the case that it is proposed by the applicants to make against the respondents and the fact that one basis for the order is in the nature of pretrial discovery, which I think is a permissible bas~s in a case of this kind involving as it does, amongst other things, alleged breaches of trust, fiduciary duty and the taking of secret commissions.
I am not persuaded that sufficient material would be available to the applicant if order 5 was not made, but the other
orders to which I have already referred, are made. I am not persuaded that everything covered by 5 is really covered by orders 1, 2 and C. Order 5 would go specifically to the matters to which it refers.
The form 01 order 5 in the notice of motion had occurred to me at first to be somewhat too wide, especially where it made references to commissions or amounts paid to companies in which the respondents held shares, whether the shares were held by them Legally or beneficially, directly or indirectly, but I am now satisfied that it is not too wide and that the form of the order should stand as lt is, but subject to an important exception. That is, at this stage of the case, it is difficult for the Court to tell whether the furnishing of the material that is required by order 5 would incriminate the respondents or not. That is a matter which they can consider and take appropr~ ate legal advice, but I think the right to decline to furnish the information
sought in 5, on the ground that the material so furnished might incriminate them, is a right which must be preserved, certainly
at this stage. Order 5 should be moulded so as to take into account the preservation of any right of the respondents in relation to self-incrimination.
The Court orders that the applicant bring in short minutes to give effect to my reasons.

The costs of today should be costs in the proceeding.

I certify that this and the preceding flve (5) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

--	Associate
Dated: 9 December 1993

Counsel for the Applicant	R W Whlte
Solicitors for the Applicant :	Mallesons Stephen Jaques
Counsel for the First & Third
Respondents	S D Robb QC
Solicitors for the First &
Third Respondents	C o r r s  C h a m b e r s
Westgarth
Counsel for Second & Fifth
Respondents	P R Garling
Solicitors for Second & Fifth
Respondents	Michael  Saunders &
Associates
Counsel for the Fourth  Respondent
Solicitor for the Fourth
Respondent	Anne Einfeld
Date of Nearinq	9 December  1 9 9 3
Date of Judgment	9  December 1 9 9 3