Case: Lifetime Investments Pty Ltd v Commercial (Worldwide) Financial Services Pty Ltd [2006] FCA 495
Outcome: considered
In comprehensive reasons for judgment for the orders made by Greenwood J on 28 April and published on 3 May 2006, [2006] FCA 495 , extending to some 55 pages and 152 paragraphs, his Honour outlined the affidavit evidence that was before him and which led him to the making of the asset preservation orders, including the orders in question. 7 At par 75 of those reasons his Honour said: '75 For present interlocutory purposes, I am prepared to accept that there is compelling evidence that Mr Wallader nominated a National Australia Bank account in the name of the First Respondent as the account to which the investment monies were to be transferred and that the monies were so transferred. I also accept that the monies were transferred for the purpose of the agreement of 30 March 2001 and were to be applied for investment purposes on the terms and conditions of that agreement. Moreover, I accept that the Applicant has not received any part of the US$2 million and no explanation has been given either orally or in correspondence or by affidavit in these proceedings as to the location of the funds, the nature of the investment, the entity holding the funds, whether the funds have been invested at all or any explanation of any dealing in relation to the funds.' 8 Later, his Honour said: '97 Document 0012 of "EMA9" is a document which bears the title "COMMERCIAL WORLDWIDE FINANCIAL SERVICES PTY LTD National Australia Bank USD A/C". 98 The document describes debit and credit entries to the account for the period "1/3/2001 to 30/6/2001". The first entry on 1 March 2001 is the receipt of US$1 million from Mr Roger de Saint Quentin... The account shows a credit entry on 4 April of US$2,000,100.00 described as "One Our Clients". The account shows two debit entries on the following day, 5 April 2001. The first is a withdrawal of US$250,000.00. The second is an amount of US$1,760,000.00. The description field for the second account contains the letters CPFS. The document does not bear an account number. CPFS may be an acronym for Commercial and Primary Financial Services Pty Ltd ("CPFSP/L"). Document "A19" is a bank statement for that company for an account at the Bank of Queensland Ltd Account BSB 124-001 USD Foreign Currency Account 170415, for the period 1 June 2001 to 1 July 2001. 99 At 1 June 2001, the opening balance was US$1,125,000.00. On 6 June 2001, a total of US$250,000.00 was transferred to two accounts at the Bank of Queensland Ltd, 93-170415 and 90-170415. 100 On 19 June 2001, US$40,000.00 was transferred to "Asia-Pacific Corp". On 19 June 2001, US$110,000.00 was transferred to Account 94-170415. On 1 July 2001, the closing balance of the account was US$725,000.00. Interest on the account of US$3,774.86 was credited to Account 90-170415. 101 Bank statements for CPFSP/L for Bank of Queensland Account BSB 124-001, USD Foreign Currency Account 170415 for the important period of the transfer on 5 April 2001 (that is, statements for the period 1 April 2001 to 1 May 2001) from the USD account of the First Respondent at the National Australia Bank into the Bank of Queensland USD account of the First Respondent are not available and were not produced to the solicitors for the Applicant on execution of the Anton Pillar order. Nor were the documents relating to the Bank of Queensland Accounts 90-170415, 93-170415 and 94-170415 produced to the solicitors on execution of the Anton Pillar order. However, the statements that were produced for CPFSP/L show that monies were transferred from the CPFSP/L account to each of Accounts 90, 93 and 94 170415. Further Inferences 102 I am prepared to draw the inference for interlocutory purposes that the amount of US$2,000,100.00 (notwithstanding the addition of US$100.00) shown as a credit in the USD account of the First Respondent on 4 April 2001 is the amount of the Applicant's USD funds the subject of Mr Severin's instructions on or about 30 March 2001 to the Applicant's bank to transfer funds to the account of the First Respondent. The date of the credit in the First Respondent's account is close to the instruction date by Mr Severin to the Applicant's bank. If acted upon reasonably promptly, the international electronic transfer to the First Respondent's account is likely to have occurred on or about 4 April. I am also prepared to infer for interlocutory purposes that the substantial transfer on 5 April to "CPFS" was a transfer to the USD account at the Bank of Queensland of CPFSP/L. Further, I infer for interlocutory purposes that withdrawal of US$250,000.00 occurred with the consent and approval of Mr Wallader.' 9 His Honour said at par 105: '105 For interlocutory purposes, I am prepared to infer that Mr Wallader has received the Applicant's funds and has applied those funds to his own use or to his use and that of his wife whether in his own name or that of his wife or through one or more companies of which he and his wife are shareholders and directors. I infer from the facts of the conduct alleged against Mr Wallader that he has dealt with the Applicant's funds so as to obfuscate the ultimate transfer or use of the funds.' 10 That finding is important for present purposes, because it expresses his Honour's inference on the material before him, and for the interlocutory purposes with which he was concerned, that Mr Wallader has applied those funds to his own use or to his use and that of his wife, whether in his own name or that of his wife or through one or more companies of which he and his wife are shareholders and directors. 11 The affidavit of Mr Wallader speaks only of the shareholdings there specified. The reference in his Honour's reasons for judgment, particularly at par 98 and following, to the company, Commercial and Primary Financial Services Pty Ltd, is important. As par 101 set out above shows, there were, at about the appropriate time of the transfer from the applicant to the Bank of Queensland account, references to a number of bank accounts in addition to those which are referred to in Mr Wallader's affidavit. 12 Greenwood J noted at par 101: 'Bank statements for CPFSP/L for Bank of Queensland Account BSB 124-001 USD Foreign Currency Account 170415 for the important period of the transfer on 5 April 200 (that is, statements for the period 1 April 2001 to 1 May 2001) from the USD account of the First Respondent at the National Australia Bank into the Bank of Queensland USD account are not available and were not produced to the solicitors for the Applicant on the execution of the Anton Pillar order. Nor were documents relating to the Bank of Queensland accounts 90-170415, 93-170415 and 94-170415.' Two of those are the accounts referred to in Mr Wallader's affidavit of assets. 13 His Honour referred to the details of the first respondent, Commercial and Primary Financial Services Pty Ltd, D and J Wallader Pty Ltd, Colinton Station Pty Ltd and Colinton Station Export Pty Ltd in his Honour's reasons in pars 107 - 109. Whether relevant information concerning the disposition of the funds advanced might be revealed in the banking records of some or all of the companies is unknown. At par 126 his Honour said: '126 The Applicant is not in a position to adduce evidence of an application of the funds by the First or Second Respondent to a particular purpose or asset. The Applicant says it simply does not know how the money has been used or applied by Mr Wallader except to say that $US250,000.00 was withdrawn by Mr Wallader on 5 April 2001 from the account of the First Respondent to which the Applicant's funds were transferred and $US1,760.000.00 was transferred to another account controlled by a company controlled by Mr Wallader and his wife.' 14 Finally, his Honour referred, at consideration number 14 in par 148, to the making of the asset preservation orders: '14 In this case, the evidence for interlocutory purposes, establishes a strong prima facie case that monies were transferred by the Applicant to the First Respondent controlled by Mr and Mrs Wallader to be applied for a particular purpose in reliance upon Mr Wallader. A substantial proportion of the funds were transferred to another company controlled by Mr and Mrs Wallader. Mr Wallader chooses not to admit the receipt of the funds and has elected not to swear any affidavit disclosing the treatment of the funds. In the period since the receipt of the funds, the Applicant has expended significant sums in improving assets under his control or under the control of proprietary entities of which he is a director. Although there is no evidence that the actual funds transferred on or about 30 March to the First Respondent have been applied in a particular way (apart from the transfer of substantial funds to the account of CPFSP/L and the withdrawal of $US250,000.00) or to a particular asset, the inference is open that Mr Wallader has applied the moneys to his own advantage or to the advantage of himself and his wife whether directy or by the vehicle of companies controlled by him.' 21 The order made by Greenwood J in the present case is not one compliance with which will infringe Mr Wallader's privilege against self-incrimination. It is an order which might involve Mr Wallader in providing material which might incriminate him in the commission of an offence, but, in my judgment, he is entitled, in answering that order, to claim the privilege against self-incrimination, as he has done. 34 Essentially, what the applicant in the principal proceedings is seeking is that by orders in aid of asset preservation, probative evidence in the civil claim will be compulsorily obtained. No doubt, Mr Wallader, at the trial, can be asked questions concerning what happened to the $2 million. It would be open to him, in respect of some of those questions to claim privilege, but, as Greenwood J noted, failure to account for what happened to the money would permit inferences to be drawn. I make it plain that no adverse inference can be drawn from the claiming of privilege on the grounds of self-incrimination; however, a failure to disclose what in fact occurred in relation to the money may be a very different matter. 35 I am not persuaded that this subsection does not apply to a witness refusing to make an affidavit of the kind required by Greenwood J. In my view, the maker of an affidavit is a 'witness' within the meaning of s 128(5). As Gibbs CJ, Mason and Dawson JJ explained in Control Consultants Pty Ltd v Commissioner for Corporate Affairs [1985] HCA 6 ; (1985) 156 CLR 385 at 393, in respect of the common law privilege against self-incrimination: 'The privilege, apart from any statutory exclusion, would protect a person against a requirement that he produce or identify incriminating documents, or reveal their whereabouts or explain their contents in an incriminating fashion.' 42 For the above reasons, all I propose to do is to declare that the disclosure order, par 7, made by Greenwood J on 28 April did not abrogate or modify the privilege against self-incrimination, and Mr Wallader is still able to claim that privilege in an affidavit. 43 The costs of and incidental to the Notice of Motion of the second respondent in the principal proceedings should be his costs in those proceedings. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender J. Associate: Dated: 5 June 2006 Counsel for the Applicant: Mr Andrew Lyons (In the Notice of Motion) Solicitor for the Applicant: Watts and Company Counsel for the Respondent: Mr James Catlin (In the Notice of Motion) Solicitor for the Respondent: Harwood Andrews Lawyers Date of Hearing: 22 May 2006 Date of Judgment: 26 May 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/696.html