Case: Jackson v Sterling Industries Limited [1987] HCA 23 ; (1987) 162 CLR 612
Outcome: referred to
Counsel for Mr Hamilton and Newpage in liquidation, Mr Johnson, submitted that Mr Parson's attitude supported the applicants' claim that the money paid into Casino Busters' bank account should be subject to an asset preservation order while the issues surrounding its payment to Casino Busters were sorted out. The power of the Federal Court to grant such relief was recognised by the High Court in Jackson v Sterling Industries Limited [1987] HCA 23 ; (1987) 162 CLR 612 at 623 per Deane J (with whom Mason CJ, Wilson and Dawson JJ agreed). It is important to bear in mind, however, that the purpose of such an order is to protect the processes of the Court from abuse not to provide security for the applicant for such an order; see generally Jackson v Sterling Industries Limited. 15 Applications for such relief are often, as in this case, made ex parte. The Court does not have the benefit of hearing argument as to why such an order should not be made from the person against whom the order is sought. For this reason the Court needs to be circumspect in making such orders. In this case, however, I am satisfied that on the evidence before me the applicants have made a prima facie case that the payment by Newpage to Casino Busters is a voidable transaction under s 588FE of the Corporations Act . Given Mr Parson's refusal to assist the provisional liquidator in the exercise of his duties and his denial of any knowledge of the transaction, there is reason to suspect that any order of the Court made to recover the money paid to Casino Busters and apparently still held in its bank account may be frustrated by prior dispersal of the assets. In the circumstances it is appropriate that I make the orders sought by the applicants, in the form of the penal notice that is annexed to these reasons, freezing the relevant bank account of Casino Busters up to but not exceeding the amount of $2,137,000 and requiring Mr Parson to give disclosure of the circumstances under which Casino Busters received the two payments mentioned above at [11]. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. Associate: Dated: 6 February 2007 On the application for a winding up order: Counsel for the Plaintiffs: J Johnson Solicitor for the Plaintiffs: Kemp Strang Counsel for the Defendant: There was no appearance for the Defendant. On the application for a freezing order: Counsel for the Applicants: J Johnson Solicitor for the Applicants: Kemp Strang Counsel for the Respondents: There was no appearance for the Respondents. Date of Hearing: 25 January 2007 Date of Judgment: 6 February 2007 PENAL NOTICE TO: Casino Busters International Pty Ltd ACN 108 453 809 AND TO: Roumald Charles Parsons (aka Ron Parsons) IF YOU: (A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR (B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU TO ABSTAIN FROM DOING, YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT. ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED. TO: Casino Busters International Pty Ltd ACN 108 453 809 AND TO: Roumald Charles Parsons (aka Ron Parsons) This is a ' freezing order ' made against Casino Busters International Pty Ltd and a ' disclosure order' made against both of you on 25 January 2007 by Justice Stone at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order. THE COURT ORDERS: INTRODUCTION 1. (a) The application for this order is made returnable immediately. (b) The time for service of the application, supporting affidavits and originating process is abridged and service is to be effected by 4.00pm Monday 29 January 2007. 2. Subject to the next paragraph, this order has effect up to and including 9 February 2007 (' the Return Date '). On the Return Date at 10.15 am there will be a further hearing in respect of this order before the Corporations Judge, Sydney Registry of the Federal Court of Australia. 3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified. 4. In this order: (a) 'Account' means BSB 033 390 Account number 210 011 in the name of Casino Busters International Pty Ltd held at Westpac Banking Corporation, Shop 39, Waverley Gardens Shopping Centre, Melgrave Victoria 3170. (b) 'applicant', if there is more than one applicant, includes all the applicants; (c) 'you', where there is more than one of you, includes all of you and includes you if you are a corporation; (d) 'third party' means a person other than you and the applicant; 5. (a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions. (b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way. FREEZING OF ACCOUNT 6. (a) You must not remove from, transfer out of or in any way dispose of, deal with or diminish any amounts standing to the credit of the Account up to the amount of AUD$2,137,000.00 (' the Relevant Amount '). (b) If the amount standing to the credit of the Account exceeds the Relevant Amount, you may deal with or remove that surplus in the Account, so long as the total amount standing to the credit of the Account still exceeds the Relevant Amount. PROVISION OF INFORMATION 7. Subject to paragraph 8, you must: (a) file and serve on the applicants within 14 days an affidavit disclosing the facts and circumstances under which the sums of $610,000.00 and $1,527,000.00 were received by Casino Busters International Pty Ltd from Newpage Pty Ltd on 1 June 2006 and 22 September 2006 respectively and as to any disposition or use by Casino Busters International Pty Ltd of the said amounts since those dates and as to the present whereabouts of the proceeds of those amounts. 8. (a) This paragraph (8) applies if you are not a corporation and you wish to object that compliance with paragraph 7 may tend to incriminate you or make you liable to a civil penalty; (b) This paragraph (8) also applies if you are a corporation and all of the persons who are able to comply with paragraph 7 on your behalf and with whom you have been able to communicate, wish to object that compliance may tend to incriminate them respectively or make them respectively liable to a civil penalty; (c) You must, at or before the further hearing on the return date (or within such further time as the Court may allow), notify the applicants in writing that you or all the persons referred to in (b) wish to take such objection and identify the extent of the objection; (d) If you give such notice, you need comply with paragraph 8 only to the extent, if any, that it is possible to do so without disclosure of the material in respect of which the objection is taken; and (e) If you give such notice, the Court may give directions as to the filing and service of affidavits setting out such matters as you or the persons referred to in (b) wish to place before the Court in support of the objection. EXCEPTIONS TO THIS ORDER 9. This order does not prohibit you from: (a) Otherwise dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and (b) in relation to matters not falling within (a), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made. 10. You and the applicants may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicants or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicants and you, and the Court may order that the exceptions are varied accordingly. 11. (a) This order will cease to have effect if you: (i) pay the sum of $2,137,000.00 into Court; or (ii) pay that sum into a joint bank account in the name of your solicitor and the solicitor for the applicants as agreed in writing between them; or (iii) provide security in that sum by a method agreed in writing with the applicants to be held subject to the order of the Court. (b) Any such payment and any such security will not provide the applicants with any priority over your other creditors in the event of your insolvency. (c) If this order ceases to have effect pursuant (a), you must as soon as practicable file with the Court and serve on the applicants notice of that fact. COSTS 12. The costs of this application are reserved to the judge hearing the application on the Return Date. PERSONS OTHER THAN THE APPLICANTS AND RESPONDENTS 13. Set off by banks: This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order. 14 . Bank withdrawals by the respondent: No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order. SCHEDULE A UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANTS 1. The applicants and the First Plaintiff undertake to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order. 2. As soon as practicable, the applicants will file and serve upon the respondents copies of: (a) this order; (b) the application for this order for hearing on the return date; (c) the following material in so far as it was relied on by the applicants at the hearing when the order was made: (i) affidavits; (ii) exhibits capable of being copied; (iii) any written submission; and (iv) any other document that was provided to the Court. (d) a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court; (e) the originating process.. 3. As soon as practicable, the applicants will cause anyone notified of this order to be given a copy of it. 4. The applicants will pay the reasonable costs of anyone other than the respondents which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent's assets. 5. If this order ceases to have effect the applicants will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect. 6. The applicants will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding. 7. The applicants will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondents or the respondents' assets. 8. The applicants will on or before 2 February 2007 file either an Interlocutory Process in these proceedings or an Originating Process seeking final relief for the repayment by Casino Busters International Pty Ltd and/or Roumald Parsons of the debt constituted by the payments totalling $2,137,000.00 made by Newpage Pty Ltd to Casino Busters International Pty Ltd, namely $610,000.00 on 1 June 2006 and $1,527,000.00 on 22 September 2006, or alternatively as an uncommercial transaction under Section 588FB of the Corporations Act, 2001 . AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/61.html