Case: Australian Prudential Regulation Authority v Siminton (No 6) [2007] FCA 1608
Outcome: cited
On 26 October 2007, Tracey J delivered judgment in proceeding number VID 1607 of 2005. The judgment is published under the designation Australian Prudential Regulation Authority v Siminton (No 6) [2007] FCA 1608. In the proceeding in which that judgment was given, the Australian Prudential Regulation Authority ("APRA") sought, among other things, relief by way of a permanent injunction against the respondent, Mr Siminton, pursuant to s 65A of the Banking Act 1959 (Cth) ("the Banking Act "). Section 65A provides that the Court may grant an injunction restraining a person from engaging in conduct, or requiring the person to do a particular act or thing, in such terms as the Court thinks appropriate, if there is a contravention or threatened contravention of the Act. 2 The particular provision to which attention was directed in that proceeding was s 7 of the Banking Act , which effectively prohibits carrying on the business of banking without a licence. Tracey J was satisfied that Mr Siminton had collected money by way of deposits from members of the public, as a result of his solicitation of those deposits, and had promised returns at a very high level, 40 or 50 per cent, described as a "profit share", rather than interest. His Honour was satisfied that Mr Siminton did not fall within s 11 of the Banking Act , which would have entitled him to carry on banking business and that, therefore, he was in contravention of s 7. A significant part of his Honour's findings about the carrying on of the business of banking related to the proposition that Mr Siminton had lent money, in the sum of $100,000, from the moneys deposited with him, to an institution called Technocash, and had promised those from whom he solicited funds that moneys would be available for loans in the future. 3 In determining what relief should be granted, his Honour decided to make permanent some injunctions that had previously been granted on an interlocutory basis. At [72]-[75] of his reasons for judgment, his Honour also proposed that the case would be one appropriate for the appointment of a receiver, under either s 57(1) or s 23 of the Federal Court of Australia Act 1976 (Cth). His Honour invited submissions from the parties on a subsequent date, 7 November 2007, in relation to the terms of appropriate orders and any additional relief. Submissions were made. On 7 November 2007, his Honour made an order that included an order appointing a receiver to give effect to the judgment and orders of the Court in proceeding number VID 1607 of 2005, by ensuring that moneys, which the Court had found to have been received by Mr Siminton in contravention of the Banking Act , were returned to depositors. The order recited that the Court had found that the Terra Nova Cache that was established by Mr Siminton was a bank, operating in conjunction with an entity called the Principality of Camside, and that members of the public were encouraged to make deposits in Terra Nova Cache in return for promised high interest payments. 4 The order appointing the receiver is some 19 paragraphs long, including a reservation of liberty to apply. It is unnecessary for present purposes to recite all of the provisions of the order, but it is necessary to refer to some specific provisions. In para 4, the Court ordered that: The receiver shall have the following powers: (a) The power to do, in Australia and elsewhere, all things necessary and convenient to be done for or in connection with, or as incidental to, the attainment of the objectives of these orders; (b) The power to require, by request in writing, that Mr Siminton and any other person who has provided banking or financial services to Mr Siminton the Terra Nova Cache and or the Principality of Camside provide such reasonable assistance to the receiver as required from time to time; and (c) The power to deal with the Funds in such manner as he thinks most beneficial to ensure compliance with the orders made by this Court. 5 In para 5, the Court ordered that: On or before 21 November 2007, Mr Siminton provide to the receiver all bank statements, books of account, receipts, invoices, correspondence or any other document in his possession, custody, power or control relating to monies received from members of the public for deposit in the Terra Nova Cache. 6 In para 17 of the order, there appears the following provision: The following additional orders shall apply in relation to the receiver: (a) the receiver shall be entitled to reasonable remuneration and reasonable costs and expenses properly incurred in the performance of his duties and the exercise of his powers as receiver to be calculated on the basis of the time reasonably spent by the receiver, his partners and staff in accordance with the scale of fees provided to the Registrar, such fees to be paid out of the Funds as a first charge; and (b) the receiver shall deliver an account for all amounts drawn by him for his remuneration, costs and expenses to the court every month until the termination of the period of receivership or until further order and pay any balances as may be due to him or by him in such manner as the Court may direct. 7 On the same day as those orders were made, 7 November 2007, Mr Siminton, by his counsel, applied to Tracey J for a stay of those orders, pending appeal. His Honour adjourned that application to 15 November 2007, when submissions were made and his Honour rejected the application for a stay. The only indication of his Honour's reasons is in the transcript of the oral reasons for judgment delivered on that day, in which his Honour canvassed proposed grounds of appeal, and did not find that they would be likely to succeed. His Honour dealt with arguments that a stay ought to be granted on the basis that the receiver would incur expenses in the course of performing his duties, and that those expenses would be thrown away if and when the appeal were determined favourably to Mr Siminton. His Honour also rejected an argument that the power to require Mr Siminton to provide information and documents would amount to a denial of his right to the privilege against self-incrimination. 8 The application today for a stay of the appointment of a receiver is effectively the same application that was made to Tracey J. As a judgment dealing with an interlocutory application, his Honour's judgment refusing a stay gives rise to no res judicata estoppel or issue estoppel against Mr Siminton, but, in the circumstances, unless I am convinced that his Honour was fundamentally wrong, or unless any new material is raised before me, I ought to follow what his Honour said and refuse to grant the application.