Austress Freyssinet v Kowalski

Introduction

1. The seventh to twelfth plaintiffs are a group of companies that formerly carried on a petroleum and transportation business in New South Wales, Queensland, and Victoria (collectively, the Xpress Group).
2. The first to sixth plaintiffs are Mr Barry Kogan and Ms Katherine Sozou in their capacity as receivers appointed to each of the Xpress Group companies (the Receivers).
3. The Receivers were appointed by National Australia Bank (NAB) during the period between 20 March and 30 March 2023 following defaults by Xpress Group companies under financing and security arrangements with NAB.
4. The first defendant, Mr Mark Bassal, is the sole director and secretary of each of the Xpress Group companies.
5. The second defendant, Mr Jamie Brown, is the sole director and secretary of each of Unified Holdings Pty Ltd (the third defendant), Unified Fuel Solutions Pty Ltd (the fourth defendant), and Unified Transportation Pty Ltd (the fifth defendant). It is convenient to refer to the third to fifth defendants collectively as the Unified Companies.
6. The sixth defendant, XTS Group Pty Ltd, is the owner of premises at 50 Victor Avenue in Kemps Creek, which it leases to one of the Xpress Group companies (the ninth plaintiff, Xpress Transport Solutions Pty Ltd) (the Kemps Creek Premises).
7. The proceedings were commenced on 31 May 2023. The relief claimed by the plaintiffs on a final basis includes a declaration that assets described in Annexure A to the amended originating process - including rigid tankers, prime movers, and tanker trailers - are property of the Xpress Group company listed in the corresponding item of Annexure A (the Annexure A Assets), and orders requiring Mr Bassal, Mr Brown, and the Unified Companies to deliver up to the Receivers any and all property of the Xpress Group companies in their possession or under their control.
8. By way of interim relief, the plaintiffs also sought orders requiring Mr Bassal, Mr Brown and the Unified Companies to deliver up to the Receivers, until further order, any of the 29 assets listed in Annexure B to the originating process in their possession or under their control (the Annexure B Assets), and orders authorising the Receivers and their agents to enter into the Kemps Creek Premises for the purpose of taking custody of the Annexure B Assets and restraining the defendants from interfering with or otherwise impeding such entry and access to the Kemps Creek Premises. The Annexure B Assets are predominantly rigid tankers, prime movers, tanker trailers, semi-trailers, and other vehicles.
9. The plaintiffs' claims for interim relief were listed for hearing on 13 June 2023. That hearing did not proceed because the Court made the following orders by consent: "1. Pursuant to section 420 of the Corporations Act 2001 (Cth) and/or rule 25.3 of the Uniform Civil Procedure Rules 2005 (NSW) and/or the Court's inherent jurisdiction, that upon the undertaking of the Plaintiffs, by their counsel, to: a. safely secure and retain possession of the assets received or taken into their possession pursuant to this order; and b. 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 this order or of any interlocutory continuation (with or without variation) of this order, until further order: c. each of the First to Fifth Defendants deliver up to the First to Sixth Plaintiffs any and all property listed in Annexure B to the Amended Originating Process dated 7 June 2023 (Amended Originating Process) that is in their possession or under their control (Annexure B Assets) within 3 days from the date of this order; d. each of the First to Fifth Defendants do not attempt to possess, deal with, use, sell, transfer or encumber any of the Annexure B Assets, other than for the purpose of delivering up that property to the First to Sixth Plaintiffs; e. for the purpose of the First to Sixth Plaintiffs or their authorised agents taking custody of the Annexure B Assets on or before the date that is 3 days from the date of this order, the Plaintiffs and their agents are authorised to enter and access the premises located at 50 Victor Avenue, Kemps Creek NSW 2178 (Kemps Creek Premises); and f. until 5.00pm on the date that is 3 days from the date of this order, the Defendants (including by their officers, employees, agents or assigns) be restrained from interfering or otherwise impeding entry and access by the First to Sixth Plaintiffs and their agents to the Kemps Creek Premises and the taking of any of the Annexure B Assets into their custody, in accordance with order 1(e) above. 2. The First Defendant provide to the First to Sixth Plaintiffs the reports required by those Plaintiffs pursuant to s 430 of the Corporations Act 2001 (Cth), as set out in the notice addressed to the First Defendant dated 27 April 2023, within 3 days from the date of this order."
10. The Court also noted, by consent, that: "6. The Defendants agree that each item described in Annexure B to the Amended Originating Process is the property of the Company listed in the column entitled 'Grantor' in Annexure B."
11. Annexure B identifies the eighth plaintiff, Xpress Group Australia Pty Ltd (XGA), as the "Grantor" in respect of each of the rigid tankers, prime movers, tanker trailers, semi-trailers, and other vehicles and assets listed in Annexure B.
12. A sealed copy of the orders was sent to Mr Bassal and Mr Brown by email at 12:49pm on 13 June 2023.
13. As referred to in more detail below, two of the Annexure B Assets have been recovered by the Receivers and a further two assets have been delivered up to them since the consent orders were made on 13 June 2023. The plaintiffs accept that, notwithstanding the agreement noted by the Court on 13 June 2023, a further four Annexure B Assets may have been sold to a third party before the consent orders were made. That leaves 21 of the Annexure B Assets presently unaccounted for. Mr Bassal has not provided the report required by order 2 made on 13 June 2023.
14. By interlocutory process filed in Court on 19 June 2023, the plaintiffs applied for orders pursuant to s 108 of the Civil Procedure Act 2005 (NSW) and/or r 38.2 of the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR): 1. requiring Mr Bassal to attend before the Court at a date and time to be fixed by the Court for examination for the purpose of being asked questions about his compliance with orders 1(c), 1(d), and 2 of the orders made on 13 June 2023 (prayer 2 of the interlocutory process); 2. requiring Mr Bassal to produce certain documents to the plaintiffs' solicitors within two days of the date of the orders (prayer 3 of the interlocutory process); 3. requiring Mr Brown to attend before the Court at a date and time to be fixed by the Court for examination for the purpose of being asked questions about his compliance, and the compliance of the Unified Companies, with orders 1(c) and 1(d) of the orders made on 13 June 2023 (prayer 4 of the interlocutory process); 4. requiring the Unified Companies to produce certain documents to the plaintiffs' solicitors within two days of the date of the orders (prayer 5 of the interlocutory process); and 5. abridging the time for service of the orders on Mr Bassal and Mr Brown to the 24 hours after the making of the orders (prayer 6 of the interlocutory process).
15. The application was made on an urgent basis. If the Court were persuaded to make the production and examination orders sought, it is desirable that any documents be produced promptly, and examinations take place within a relatively short time thereafter, so that the plaintiffs can promptly take such action as they may be advised in respect of any non-compliance with the orders made on 13 June 2023 that may be discovered through the examinations, with a view to securing possession of the 21 vehicles and assets that are presently unaccounted for. The fact that Mr Bassal has communicated to the plaintiffs that he intends to travel overseas soon, and may be away for a few months, adds to the urgency. An order was therefore made for the interlocutory process to be returnable instanter, and it was heard on 19 June 2023.
16. The application initially proceeded ex parte, as is permitted by UCPR r 38.2(3). Mr Brown was apparently aware of the application and was present in Court when the hearing commenced. Mr Brown initially informed the Court that he only wished to observe and did not wish to be heard. Mr Brown changed his mind during the course of the hearing, and I heard his submissions in opposition to the interlocutory process at the conclusion of the plaintiffs' submissions. The hearing was conducted on an ex parte basis insofar as the application concerns Mr Bassal and the Unified Companies.
17. The plaintiffs relied on the following evidence: 1. an affidavit of Mr Kogan sworn on 31 May 2023, and exhibits BKF1 to BKF7 to that affidavit; 2. an affidavit of Mr Kogan sworn on 16 June 2023, and exhibits BKF9 and BKF10 to that affidavit; 3. an affidavit of Mr Kogan sworn on 19 June 2023; and 4. a chain of emails concerning the negotiation of a fuel supply arrangement during the period January to April 2023, which was tendered as exhibit 1.
18. Mr Brown did not adduce any evidence. That is unsurprising in circumstances where he most likely only became aware of the application a very short time prior to the commencement of the hearing.
19. I reserved judgment at the conclusion of the hearing on 19 June 2023. Having taken further time to consider the evidence adduced by the plaintiffs, the plaintiffs' submissions, and the submissions made by Mr Brown, I determined to make orders substantially in the terms sought in prayers 2 to 6 of the interlocutory process, but with some amendments to confine the scope of the material questions that are to be the subject of the examinations for reasons that are explained below, and subject to a further order concerning any issues that may arise prior to or during the examinations concerning privilege against self-incrimination or privilege against exposure to a penalty. Those orders were made on the morning of 20 June 2023 on the basis that my reasons for doing so would be published as soon as possible. These are my reasons.

Applicable principles

1. Section 108 of the Civil Procedure Act relevantly provides: "(1) The court may, subject to and in accordance with the uniform rules, make an order requiring a person bound by a judgment or order - (a) to attend the court to be orally examined as to any material question, or (b) to produce any document or thing that is in his or her possession and that relates to a material question. (2) An order under this section with respect to a person that is a corporation - (a) may be addressed to any officer or former officer of the corporation, and (b) binds any such officer or former officer as if he or she were the person bound by the judgment or order. … (5) For the purposes of this section, the material questions in relation to a judgment or order are - … (b) to the extent to which it does not require the person bound by it to pay money, such questions concerning or in aid of the enforcement or satisfaction of the judgment or order as may be specified in the order under this section."
2. The relevant provisions of the UCPR are found in Part 38.
3. Insofar as they apply to proceedings in this Court that do not involve a judgment or order for the payment of money, those rules require that an application for an order for examination with respect to the enforcement of a judgment or order must be supported by an affidavit deposing that the judgment or order remains unsatisfied (r 38.2(1)(a)).
4. Part 38 also provides that: 1. an order for examination must specify the time, date and place at which the person bound by the judgment or order is required to attend for examination (r 38.3(2)); 2. the order must be served on the person bound by the judgment or order at least 14 days before the day on which they are required to attend for examination (r 38.3(3)); 3. the examination is to be conducted at the same venue as that where the judgment or order was entered (r 38.4(1)); 4. unless the Court orders otherwise, the examination is to be conducted by the person on whose application the order for examination was made (r 38.5(1)); and 5. an order for examination may be made against an officer or former officer of the corporation that is bound by the judgment or order in question (r 38.7(1)(b)).
5. The plaintiffs relied on the judgment of Austin J in Austress Freyssinet v Kowalski [1] as delineating the scope of the Court's power to make an order under s 108 of the Civil Procedure Act of the kind sought in the present case requiring persons bound by a judgment or order of the Court that does not require payment of money to attend for oral examination, and to produce documents, relating to "material questions" concerning or in aid of the enforcement or satisfaction of that judgment or order.
6. In Austress Freyssinet v Kowalski, the Court had granted an injunction restraining the defendant from being involved in businesses of a certain kind and had noted in the terms of the orders that it would be a breach of the injunction for the defendant to continue to hold office as a director of a specified company or to retain shares in another specified company. The effect of the injunction was that the defendant was required to resign as a director of the first company and to divest himself of his shares in the second company. The defendant had taken both of those steps but had transferred the shares to a company controlled by his accountant for consideration of $10.00, giving rise to questions about whether the transferee held those shares on resulting trust for the defendant, and whether the defendant continued to be involved in the business of that company contrary to the injunction. [2]
7. After noting that s 108 of the Civil Procedure Act expressly extends to an examination of a person bound by a judgment or order that does not require payment of money, Austin J said: [3] "In such a case, it gives the court a discretion to allow any questions "concerning or in aid of enforcement or satisfaction of the judgment or order". In my view the language of the section is inherently available to be used in aid of enforcement of an injunctive order, in circumstances where the evidence, while not establishing failure to comply with the order, points to circumstances raising a question about compliance that reasonably warrants investigation."
8. Austin J later described s 108 as providing a useful function in circumstances such those in the case before his Honour where the limited information available to the plaintiff was arguably insufficient for them to conclude that the defendant was in contempt of the orders. His Honour said: [4] "It would be an unsatisfactory situation if, in such a case, the person with the benefit of the orders had no other remedy than to commit to an immediate application for punishment for contempt. It is in my view reasonable for a party in the position of the plaintiffs to employ the examination and production procedure with a view to clarifying whether the transfer has led to a resulting trust or the presumption of resulting trust has been rebutted by further facts."
9. His Honour did not expressly refer to UCPR r 38.2(1), which requires the application for an order for examination under s 108 to be supported by an affidavit as to specified matters, including "that the judgment or order remains unsatisfied". However, it is implicit in his Honour's reasons and description of the purpose or "function" of s 108 that that section can only be consistent with r 38.2(1) being construed - in cases involving injunctive or other orders that do not require payment of money - as requiring the application for the examination order to be supported by an affidavit that the party entitled to the benefit of the judgment or order has been unable to ascertain that it has been satisfied or satisfied in full, so that there has arguably been non-compliance by the party bound by the judgment or order. If r 38.2(1) were construed as requiring the application to be supported by an affidavit establishing conclusively that the judgment or order remains unsatisfied, the examination and production of documents for which s 108 provides would frequently serve no purpose in cases where the judgment or order requires the party bound by it to do something or refrain from doing something rather than to pay money. Taking the present case as an example, the plaintiffs would not be able to make the application for the examination order in relation to order 1 made on 13 June 2023 without proving on the balance of probabilities that some or all of the 21 vehicles, trailers, and other assets that remain unaccounted for are in the possession or control of the one or more of Mr Bassal, Mr Brown, and the Unified Companies, or that they were in their possession or under their control as at 13 June 2023.
10. For those reasons, I respectfully consider that the manner in which Austin J implicitly construed r 38.2(1) is consistent with the evident purpose of s 108 of the Civil Procedure Act insofar as it applies to compliance with non-monetary judgments or orders, and I accept the plaintiffs' submission that the power under s 108 is available to be used in aid of enforcement of the orders made on 13 June 2023 if the evidence, whilst not conclusively establishing a failure to comply with those orders, raises questions about compliance with those orders that reasonably warrant investigation.
11. If I had taken a different view about the construction of r 38.2(1), I would have made an order pursuant to s 14 of the Civil Procedure Act dispensing with the requirement for the plaintiffs' supporting affidavits to establish that order 1 made on 13 June 2023 remains unsatisfied.

Consideration and determination

1. The plaintiffs adduced extensive evidence in support of their application and relied on several aspects of that evidence as raising questions about compliance with the orders made on 13 June 2023. The following aspects of that evidence were sufficient to persuade me that there are questions about compliance that reasonably warrant investigation. My description of the salient aspects of the evidence at [32]-[65] below is a summary of that evidence only, and should not be understood as findings of fact.
2. Based on their investigations to date, the Receivers understand that the Xpress Group's petroleum transportation businesses operated primarily in New South Wales and, to a lesser extent, in Queensland and Victoria. The Receivers understand that the business activities of the Xpress Group included: 1. ownership and maintenance by XGA of a fleet of prime movers, tanker trailers, and other transport logistics assets that were primarily utilised for dangerous goods transportation; 2. the petrol wholesale operations of the seventh plaintiff, Xpress Fuel Australia Pty Ltd (XFA), which supplied fuel to the operators of petrol stations; and 3. the transport operations of the ninth plaintiff, Xpress Transport Solutions Pty Ltd (XTS), which transported the fuel from supply depots to customers using the fleet owed by XFA.
3. On 20 March 2023, NAB appointed the Receivers as joint and several receivers over accounts receivable assets of XFA.
4. On 27 March 2023, Mr Bassal sent an email to Mr Nick Zoras of Platinum One Accounting Services, stating: "I need the following companies open as a matter of urgency please. Xpress Fuel Services Xpress Transport Services The Xpress Group (assets holding) Me as director, and 100% shares in Samia Bassal …"
5. The names of the three companies that Mr Bassal asked Mr Zoras to "open" are very similar to the names of the seventh plaintiff (Xpress Fuel Australia Pty Ltd), the ninth plaintiff (Xpress Transport Solutions Pty Ltd), and the eighth plaintiff (Xpress Group Australia Pty Ltd), of which Mr Bassal was the sole director and secretary.
6. Mr Zoras replied to Mr Bassal on 27 March 2023 attaching an invoice for the establishing of the three new companies that Mr Bassal had requested, seeking confirmation that proposed shareholder was Mr Bassal's mother and stating: "I note the names chosen - these will cause a level of confusion".
7. Mr Bassal replied to Mr Zoras seeking confirmation that the three new companies "will be open today".
8. After some further correspondence with Mr Zoras and Ms Victoria Buckley of Platinum One Accounting Services, Mr Bassal sent a further email to them on the afternoon of 27 March 2023 instructing them to: "… please make Albert Bassal as director of all companies, and Samia Bassal as shareholder. Just keep my name out of it for now."
9. Mr Zoras replied to that email on the evening of 27 March 2023 asking for details of the full name, date and place of birth and address of "your mum and dad" and advising that "your dad" would need a Directors Identification Number in order to become a director.
10. Mr Bassal responded by email on the morning of 28 March 2023, advising that that Mr Brown - "A very close Friend and soon to be part of our team" - had agreed to be the director of the three new companies. The email stated Samia Bassal was still to be the shareholder of the new companies.
11. The following three companies were incorporated on 28 March 2023: 1. XTS Pty Ltd, which subsequently changed its name to Unified Group Admin Pty Ltd on 8 May 2023 and then changed its name again to Unified Transportation Pty Ltd on 9 May 2023; 2. Xpress Fuel Services Pty Ltd, which subsequently changed its name to Unified Fuel Solutions Pty Ltd on 8 May 2023; and 3. Xpress Aust NSW Pty Ltd, which subsequently changed its name to Unified Holdings Pty Ltd on 8 May 2023.
12. Those three companies are the Unified Companies
13. Samia Bassal is the sole shareholder and Mr Brown is the sole director of each of the Unified Companies. The address of Platinum One Accounting is the registered office address and principal place of business for each company.
14. On 30 March 2023, NAB appointed the Receivers as joint and several receivers and managers of all of the assets of XGA, XTS and other members of the Xpress Group. [5] The Receivers' existing appointment in respect of XFA was extended to all assets of XFA.
15. Prior to appointing the Receivers on 30 March 2023, NAB had issued several notices of default and demand to the Xpress Group companies under the NAB finance facility documents, foreshadowing NAB's intention to enforce securities if facilities were not repaid.
16. Mr Bassal was notified on the evening of 30 March 2023 that the Receivers had been appointed as receivers and managers of the businesses and assets of the Xpress Group.
17. During the period from 30 March 2023, the Receivers formed the view that the Xpress Group's books and records, including its asset register, were not all current, complete, and accurate. The Receivers took various steps to ascertain and locate the assets of the Xpress Group. Those steps included searching road and maritime registration databases, obtaining a register of insured vehicles from the Xpress Group's insurance brokers, searching the Personal Property Securities Register and obtaining information from security holders on that Register, inspecting the Kemps Creek Premises, and engaging Pickles Auctions Pty Ltd (Pickles) to assist with the identification and recovery of assets and to act as the Receivers' asset collection agent.
18. During the period from January to March 2023, one or more Xpress Group companies had been negotiating an agreement for the supply of fuel to a company or business known as "Limcora" and a lease associated with that fuel supply agreement. Marsdens Law Group (Marsdens) were advising Xpress Group and assisting with the drafting of the fuel supply agreement and lease. On 30 March 2023, the NSW Business Development Manager for Xpress Group delivered signed agreements to Marsdens' offices. On 2 April 2023, Mr Bassal sent an email to the Business Development Manager, copied to Marsdens, stating: "The lessee company is now changed to Xpress Fuel Services and I will have a new ABN soon". Xpress Fuel Services was the name of one the new companies that Mr Bassal had caused to be incorporated on 28 March 2023.
19. On 4 April 2023, the Receivers ceased all trading operations of each of the Xpress Group companies and terminated the employment of all employees.
20. At 10:15pm on 4 April 2023, an email entitled "Continuation of Employment with XFS" was sent in the name of Mr Brown from the email address admin@xfs.au. The email stated (emphasis in original): "Good evening all, I apologise for the late email. Firstly, My name is Jamie Brown and my companies will tomorrow commence servicing the existing client base of your previous employer. I understand today your employment was terminated and I am formally offering you employment within my group of companies. I have engaged Mr Mark Bassal as a Business Consultant and adviser to coordinate your daily working activities and you will take direction from Mr Bassal under my authority. As your termination was totally unexpected we were unable to prepare the necessary employment contracts prior to your termination. Mr. Rakend Sundaran will be assisting with your transition into the new company and will prepare all the necessary information to ensure you continue to be paid next week, within new employment agreements. Please continue your existing duties tomorrow 5 April 2023 as normal. Please understand it is Business as Usual. I am hopeful you will accept my offer and return to work tomorrow morning? Please DO NOT communicate with any other person other than Mr Bassal or myself. Please ensure you continue to observe all OH&S and WHS requirements as previously required. … Welcome to what will be a new and exciting business as we take on the new challenges offered within an emerging and exciting energy market."
21. On 11 April 2023, a prime mover and two tanker trailers which the Receivers had identified as assets of XGA, and which had been secured by Pickles on behalf of the Receivers, were removed from a Pickles site in Chullora by persons who drove around the side of the boom gate at the entrance to the Pickles site and then used their own keys to the prime mover to drive it and the tanker trailers away. Pickles reported the matter to the police. On 14 April 2023, one of the vehicles which was installed with a GPS tracking system was tracked to the Kemps Creek Premises. On 1 May 2023, Mr Bassal sent an email to Mr Stewart Dodwell of Pickles attaching a copy of a spreadsheet prepared by Pickles listing several assets that the Receivers had identified as property of the Xpress Group. Mr Bassal had inserted his comments into the copy of the spreadsheet attached to his email. In relation to the prime mover and one of the tanker trailers that were removed from Pickles' Chullora site on 11 April 2013, Mr Bassal had inserted the comment: "Secured by Mark". In relation to the second tanker trailer, Mr Bassal had inserted the comment: "Not owned by Group".
22. On 21 April 2023, New South Wales police pulled over and detained a prime mover and two tanker trailers in Pheasants Nest. The Receivers had identified those vehicles as property of XGA and had reported them stolen a few days earlier. The tankers were loaded with fuel at the time, and a bill of lading recovered from the vehicle recorded the carrier name as "Xpress EZ" and Crookwell as the destination for the fuel. Mr Brown sent an email to Mr Dodwell of Pickles the following day, which stated: [6] "I have been advised that a load of fuel which was suppose to be taken from Kemps Creek has been detained whils being towed by and alleged stolen vehicle, this fuel belongs to a third party who has paid for the load. It was my understanding that alternative transport had been arranged as Mr Bassal was required to return vehicles for collection by you. Can you please advise a suitable time to have the fuel decanted and delivered to the owner? If you are able to assist with this urgent matter to assist in delivering the fuel it would be highly appreciated. Mr Bassal has passed a number of his customers to me as he is no longer able to service them, and is assisting with the good will transition."
23. It appears from Mr Brown's email that the fuel delivery had been arranged as part of the business of one of the Unified Companies.
24. On 26 April 2023, Ampol advised the Receivers that Xpress trucks were still actively supplying fuel to petrol station sites. Ampol subsequently provided examples of delivery dockets which identified the prime movers and trailers involved in that supply. The Receivers had identified those prime movers and trailers as property of XGA. Ampol also provided the Receivers with copies of invoices for fuel deliveries that had been issued by the Unified Company that was then operating under the name Xpress Fuel Services Pty Ltd.
25. On 27 April 2023, the Receivers issued a notice to Mr Bassal requiring him to prepare and submit to the Receivers by 5:00pm on 2 May 2023 a verified report pursuant to s 430 of the Corporations Act 2001 (Cth) setting out the information specified in paragraph 3.3 of the notice, including: 1. the name, address and contact details of the person or persons holding assets of the Xpress Group and the current location of those assets (paragraph 3.3(a)); 2. information and documents regarding the incorporation of the Unified Companies, including the nature of Mr Bassal's role and involvement in those companies (paragraph 3.3(f)); and 3. a Report on Company Activities and Property (ROCAP) pursuant to s 429 of the Corporations Act (paragraph 3.3(g)).
26. Mr Bassal did not provide, and has still not provided, the s 430 report. Mr Bassal did purport to provide a ROCAP in respect of XGA on 27 April 2023, but that did not include any details of XGA's vehicles or other plant and equipment. On 15 June 2023, Mr Brown emailed to the Receivers ROCAPs that appear to have been signed by Mr Bassal during the period from 5 April to 27 April 2023 for other companies in the Xpress Group, but those ROCAPs also failed to list assets of the companies with the exception of receivables and real property assets owned by the twelfth plaintiff, Press Australia Pty Ltd in its own capacity as trustee of the Lassab Trust.
27. On 17 May 2023, police stopped a prime mover and two tanker trailers near Wollongong. Those vehicles were bearing number plates that the police officer ascertained were not the number plates registered to them. It appears that the police officer conducted a search which identified that the prime mover was registered in the name of XGA. The officer contacted Mr Daniel Rigg of the Receivers' firm and advised him that the vehicles had been detained. However, the officer formed the view that the ownership dispute was a civil matter and released the vehicles back into the custody of the driver after he produced and reaffixed the correct registration plates.
28. As part of their work referred to at [47] above, the Receivers prepared an asset register itemising rigid tankers, prime movers, tanker trailers, other vehicles, and other plant and equipment that are owned, or that appear to be owned, by Xpress Group companies. As referred to earlier in these reasons, the Receivers commenced these proceedings on 31 May 2023 claiming, inter alia, a declaration that the Annexure A Assets are property of the Xpress Group company listed in the corresponding item of Annexure A to the originating process (now the amended originating process), and orders requiring Mr Bassal, Mr Brown, and the Unified Companies to deliver up to the Receivers any and all property of the Xpress Group companies in their possession or under their control.
29. There is evidence to the effect that Mr Bassal and Mr Brown have given continually changing and inconsistent information to the Receivers and to Pickles concerning the whereabouts of the Xpress Group's assets, including vehicles owned by XGA, during the course of the receivership. For example, there is evidence that Mr Bassal told Mr Dodwell from Pickles on 17 April 2023 that he had been locked out of the Kemps Creek Premises, that many assets had been sold or stolen, and that he did not know where assets were. There is evidence that, in the same conversation, Mr Bassal admitted to Mr Dodwell that he had taken the prime mover and tanker trailers from the Pickles site the previous week and said that he had done so because he considered that those vehicles had been stolen from him. [7]
30. There is evidence that Mr Dodwell of Pickles attended the Kemps Creek Premises on 13 June 2023 with a view to taking possession of the Annexure B Assets on behalf of the Receivers in accordance with the orders made earlier that day. Mr Bassal and Mr Brown met Mr Dodwell there and advised him that several of the Annexure B Assets had been repossessed by another creditor, PACCAR Financial Pty Ltd (PACCAR). However, PACCAR's solicitors had earlier informed the Receivers' solicitors that PACCAR is not in possession of any of the Annexure B Assets and does not claim to have an interest in the Annexure B Assets.
31. Pickles was able to locate and take possession of only two of the Annexure B Assets at the Kemps Creek Premises on 13 June 2023. Mr Bassal has delivered up to the Receivers a further two Annexure B Assets, both of them passenger vehicles. Mr Bassal, Mr Brown, and the Unified Companies have not voluntarily delivered up possession of any prime movers, tankers or other commercial vehicles listed in Annexure B. The plaintiffs accept that, notwithstanding the defendants' agreement noted by the Court on 13 June 2023 that all of the Annexure B Assets are the property of XGA, four of those assets may have been sold to a third party prior to 13 June 2023. That leaves 21 of the Annexure B Assets presently unaccounted for.
32. Taken as a whole, the evidence summarised above suggests that Mr Bassal caused the Unified Companies to be incorporated on an urgent basis just days before NAB appointed the Receivers as receivers and managers of all of the business and assets of the Xpress Group, and at a time when NAB had issued notices of default and demand under the Xpress Group's finance facilities foreshadowing the exercise of its security rights and had already appointed the Receivers to limited assets of XFA. Mr Brown agreed to be the director of the Unified Companies and Mr Bassal caused the shares in those companies to be issued to his mother in circumstances where he wanted to "keep my name out of it for now". Three days after the Receivers' appointment, Mr Bassal took steps to arrange for one of the Unified Companies to enter into and have the benefit of a fuel supply agreement and lease that the Xpress Group had been negotiating with one of its customers since January 2023. On the same day that the Receivers determined that the Xpress Group would cease trading, Mr Bassal and Mr Brown made arrangements for the Unified Companies to immediately commence servicing the Xpress Group's customers on a "business as usual" basis. The Xpress Group's customers require the supply and delivery of fuel to petrol stations located throughout New South Wales, and in some parts of Queensland and Victoria. Servicing those customers requires the use of rigid tankers, prime movers, and tanker trailers. The evidence of Mr Bassal's unauthorised removal of a prime mover and two tanker trailers from Pickles' yard on 11 April 2023 after those vehicles had been secured on behalf of the Receivers, the evidence of the information provided by Ampol, and the evidence of the police operations on 21 April and 17 May 2023 and Mr Brown's email referred to at [52]-[54] and [57] above, strongly suggests that the Unified Companies are servicing the Xpress Group's former customers using vehicles owned by XGA. Mr Bassal has failed to comply with his obligation under s 430 of the Corporations Act and under order 2 made on 13 June 2023 to provide verified information about the Xpress Group's assets. Such information as has been provided by Mr Bassal and Mr Brown has been changing and internally inconsistent, and inconsistent with information obtained by the Receivers from other sources. Mr Bassal, Mr Brown, and the Unified Defendants have agreed that the Annexure B Assets are the property of XGA, yet 21 of those assets remain unaccounted for.
33. As the plaintiffs submitted, the evidence raises real questions about the whereabouts of the outstanding Annexure B Assets, whether they are presently in the possession or under the control of Mr Bassal, Mr Brown, or the Unified Defendants, and, if not, whether they were removed from their possession or control after the orders were made on 13 June 2023. I accept the plaintiffs' submissions that those questions reasonably warrant investigation.
34. Mr Brown made submissions to the effect that the Xpress Group companies had fallen into financial distress when one of its employees had engaged in fraudulent behaviour. According to Mr Brown, Mr Bassal was overseas and in poor health when that occurred, and has been looking into the situation since his return to Australia in March 2023. Mr Brown submitted that he had agreed to be appointed to the Unified Companies only after receiving advice that the conduct of the business operated by those companies would not involve any breach of any obligation owed by the Xpress Group companies to NAB or to the Receivers. Mr Brown submitted that that the business being carried on by the Unified Defendants was not a bulk fuel supply business and was not the same as the business of the Xpress Group companies. Mr Brown submitted that he has no control over or knowledge about the assets of the Xpress Group companies, and he has no control over what Mr Bassal does with those assets. Mr Brown further submitted that information he has provided to the Receivers and to Pickles from time to time about the whereabouts of the assets has been information from Mr Bassal that he has simply passed on. Mr Brown submitted that he has no control over the Kemps Creek Premises.
35. At least some of the matters raised in Mr Brown's submissions, if the subject of sworn evidence, would potentially be relevant to whether Mr Bassal, Mr Brown, and the Unified Companies have failed to comply with order 1 made on 13 June 2023. However, Mr Brown's submissions do not answer the questions raised by the evidence presently before the Court about the whereabouts of, and control over, the outstanding Annexure B Assets. Nor do Mr Brown's submissions persuade me that those questions do not reasonably warrant investigation. In particular, Mr Brown's submissions did not engage in any meaningful way with the questions raised by the evidence about how the newly incorporated United Companies have been servicing former customers of the Xpress Group since 5 April 2023 if they have not been using prime movers and tanker trailers owned by XGA, why drivers who appear to have been performing fuel deliveries on behalf of the Unified Companies were pulled over by police on two occasions and found to be driving prime movers that the evidence presently before the Court indicates were owned by XGA, and why one of those drivers had gone to the trouble of affixing false registration plates to the prime mover and the tanker trailers.
36. Prayer 2 of the interlocutory process seeks an order requiring Mr Bassal to attend the Court for oral examination: "… for the purpose of being asked questions in relation to his compliance with orders 1(c), 1(d) and 2 of the orders made by the Court on 13 June 2023 (Orders), including: (a) questions concerning the steps the First Defendant has taken to comply with the Orders; (b) questions concerning any possession, dealings with, use, sale, transfer or encumbrance of any of the "Annexure B Assets" (within the meaning of the Orders), actual or attempted, by the First Defendant, since the date of the Orders. (c) questions concerning the ownership, possession and location of the Annexure B Assets; (d) questions concerning each of the matters in sub-paragraphs 3.3(a)-(g) of the notice addressed to the Frist Defendant dated 27 April 2023, referred to in order 2 of the Orders."
37. For all of the reasons explained above, I am satisfied that the Court's power under s 108 of the Civil Procedure Act extends to making those orders, and that the orders should be made in all the circumstances of this case, to the extent that they concern compliance with orders 1(c) and (d) made on 13 June 2023 and subject to one amendment to the description of the scope of the questions in prayer 2(c). That amendment involves confining questions concerning the ownership, possession, and location of the Annexure B Assets to questions that are directed to the ownership, possession, and location of those assets in the period on and from the making of the orders on 13 June 2023. I consider that this amendment is necessary and appropriate in circumstances where the orders made on 13 June 2023 required the first to fifth defendants to deliver up Annexure B Assets that were then in their possession and control. The examination of Mr Bassal concerning his compliance with those orders is not an opportunity for the plaintiffs to conduct an inquiry at large into questions of ownership, possession, and location of the Annexure B assets at any point in time that may be of interest to the Receivers, or to examine Mr Bassal about the examinable affairs of the Xpress Group companies. However, the amendment does not preclude the examiner from asking questions about the ownership, possession, and location of Annexure B assets at a time prior to 13 June 2023 if and to the extent that those questions are relevant to the question whether those assets have been in the possession or under the control of Mr Bassal on or after 13 June 2023, or if those questions are otherwise relevant to the question of Mr Bassal's compliance with the orders made on 13 June 2023. Whether or not any particular question is within the scope of the order under s 108 of the Civil Procedure Act will be a matter for the judicial officer presiding over the conduct of the examination. I otherwise accept the plaintiffs' submission that the terms of the orders sought in prayers 2(a)-(c) of the interlocutory process identify with the appropriate degree of specificity the material questions about which the plaintiffs may examine Mr Bassal. [8]
38. I do not consider that the evidence raises questions warranting investigation concerning Mr Bassal's compliance with order 2 made on 13 June 2023. That order required Mr Bassal to provide to the Receivers the report required pursuant to s 430 of the Corporations Act, as set out in the notice issued by the Receivers to Mr Bassal dated 27 April 2023. Mr Kogan's evidence establishes that Mr Bassal has not provided the report. That is a further reason why it is appropriate to make the orders sought by the plaintiffs in prayers 2(a) to (c) of the interlocutory process. However, questions of the kind referred to in prayer 2(d) are directed to extracting the substance of the information required in the s 430 report by different means, rather than to investigating Mr Bassal's compliance with order 2 made on 13 June 2023. No such questions arise for investigation, as Mr Bassal has plainly not complied with that order. The orders to be made for the examination of Mr Bassal will not include the terms of prayer 2(d) of the interlocutory process.
39. Prayer 4 of the interlocutory process seeks an order requiring Mr Brown to attend Court for oral examination: " … for the purpose of being asked questions in relation to compliance by the Second, Third, Fourth and Fifth Defendants' (Unified Defendants) compliance with orders 1(c) and 1(d) of the Orders, including: (a) questions concerning the steps the Unified Defendants have taken to comply with the Orders; (b) questions concerning any possession, dealings with, use, sale, transfer or encumbrance of any of the Annexure B Assets, actual or attempted, by the Unified Defendants, or any other defendant, since the date of the Orders; (c) questions concerning the ownership, possession and location of the Annexure B Assets; (d) questions concerning the extent to which any of the Unified Defendants have, at any time, possessed or used the Annexure B Assets."
40. For all of the reasons explained above, I am satisfied that the Court's power under s 108 of the Civil Procedure Act extends to making those orders, and that the orders should be made in all the circumstances of this case, subject to amending the description of the scope of the questions in prayers 4(c) and 4(d) to same effect and for the same reasons as the amendment to prayer 2(c) discussed at [67] above. Those amendments will be incorporated into the orders to be made in respect of the examination of Mr Brown.
41. The proposed production orders in prayers 3 and 5 of the interlocutory process require Mr Bassal (prayer 3), Mr Brown (prayer 5), and the Unified Companies (prayer 5) to produce any document in their possession, which has been created between 13 June 2023 and the date of the proposed production orders: "(a) referring to the use, sale, transfer or encumbrance of any of the Annexure B Assets; (b) referring to the movement or location (at any point in time) of any of the Annexure B Assets, save for documents previously produced to the Plaintiffs."
42. In my opinion, the scope of documents required to be produced is expressed in terms that are appropriate to limit production to documents that relate to the material questions to which the examinations are to be confined, as discussed above. Although the proposed production orders cover documents referring to the movement or location of the Annexure B Assets at any time, they are limited to such documents created during the period between the making of the orders on 13 June 2023 and the date of the production orders. Any such documents created during that period in which Mr Bassal, Mr Brown, and the Unified Companies were required to deliver up the Annexure B Assets to the Receivers, are highly likely to be relevant to compliance with the 13 June 2023 orders even if the documents themselves record or refer to the movement or location of the Annexure B Assets at an earlier time.
43. I note Mr Brown's submission that the order proposed in prayer 5 of the interlocutory process is not necessary because the documents have already been provided to the plaintiffs. If and to the extent that documents have already been provided, the terms of the order will not require those same documents to be produced.
44. The plaintiffs' submissions did not address how an order made under s 108 of the Civil Procedure Act for examination or production of documents should operate in the event that the person required to comply with the order claims that the production of documents or answering questions asked during the examination may tend to prove that the person has committed an offence arising under an Australian law or a law of a foreign country, or that they are liable to a civil penalty. Mr Bassal and Mr Brown have not yet had an opportunity to consider and address any such questions that might arise. In the circumstances, I consider that it is appropriate to make a further order to the effect that the examination and production orders apply subject to any order to the contrary that may be made by the Court in determining any application by Mr Bassal or Mr Brown to be excused from complying with those orders on the grounds that the production of any document or documents, or answering questions asked during examinations, may tend to prove that Mr Bassal or Mr Brown has committed an offence, or is liable to a civil penalty. For abundance of caution, I record that I have not formed any view about whether Mr Bassal or Mr Brown may be so exposed, or about whether there would be any proper basis for them to seek to invoke the privilege. The further order that I intend to make merely preserves their ability to make any application seeking to invoke the privilege should they wish to do so. Any such application will be determined on its merits at the appropriate time.
45. UCPR r 38.3(3) requires that an order for examination be served on the examinee at least 14 days before the day on which he or she is required to attend for examination. I accept the plaintiffs' submissions that, for the reasons referred to at [15] above, it is appropriate in the circumstances of this case to abridge that time for service until 24 hours after the making of the orders under s 108 of the Civil Procedure Act. The plaintiffs have nominated 28 June 2023 as the date for the examination of Mr Bassal and 7 July 2023 as the date for the examination of Mr Brown. Service within 24 hours will therefore effectively give Mr Bassal seven days' notice and Mr Brown 16 days' notice of the forthcoming examinations.
46. The plaintiffs seek an order for costs. I consider it appropriate to reserve the question of costs. The plaintiffs will be at liberty to make an application in relation to costs of the interlocutory process and the examinations following the completion of the examinations, or when these proceedings are finally determined.
47. For all of the foregoing reasons, the following orders were made on 20 June 2023: 1. Subject to order 6 below, order pursuant to section 108 of the Civil Procedure Act 2005 (NSW) that the First Defendant attend before the Court, at 10:30am on 28 June 2023 at Queen's Square in Sydney for oral examination for the purpose of being asked questions in relation to his compliance with orders 1(c) and 1(d) of the orders made by the Court on 13 June 2023 (Orders), including: 1. questions concerning the steps the First Defendant has taken to comply with the Orders; 2. questions concerning any possession, dealings with, use, sale, transfer or encumbrance of any of the "Annexure B Assets" (within the meaning of the Orders), actual or attempted, by the First Defendant, since the date of the Orders; 3. questions concerning the ownership, possession and location of the Annexure B Assets during the period since the date of the Orders (including, for the avoidance of doubt, the date of the Orders). 1. Subject to order 6 below, order pursuant to section 108 of the Civil Procedure Act 2005 (NSW) that the First Defendant produce to the Plaintiffs' solicitors within two days of the date of these orders any document in his possession, created between 13 June 2023 and the date of these orders: 1. referring to the use, sale, transfer or encumbrance of any of the Annexure B Assets; 2. referring to the movement or location (at any point in time) of any of the Annexure B Assets, save for documents previously produced to the Plaintiffs. 1. Subject to order 6 below, order pursuant to section 108 of the Civil Procedure Act 2005 (NSW) that the Second Defendant attend before the Court, at 10:00am on 7 July 2023 at Queen's Square in Sydney for oral examination for the purpose of being asked questions in relation to compliance by the Second, Third, Fourth, and Fifth Defendants' (Unified Defendants) with orders 1(c) and 1(d) of the Orders, including: 1. questions concerning the steps the Unified Defendants have taken to comply with the Orders; 2. questions concerning any possession, dealings with, use, sale, transfer or encumbrance of any of the Annexure B Assets, actual or attempted, by the Unified Defendants, or any other defendant, since the date of the Orders; 3. questions concerning the ownership, possession and location of the Annexure B Assets during the period since the date of the Orders (including, for the avoidance of doubt, the date of the Orders); 4. questions concerning the extent to which any of the Unified Defendants have, at any time during the period since the date of the Orders (including, for the avoidance of doubt, the date of the Orders), possessed or used the Annexure B Assets. 1. Subject to order 6 below, order pursuant to section 108 of the Civil Procedure Act 2005 (NSW) that the Unified Defendants each produce to the Plaintiffs' solicitors within two days of the date of these orders any document in their possession, created between 13 June 2023 and the date of these orders: 1. referring to the use, sale, transfer or encumbrance of any of the Annexure B Assets; 2. referring to the movement or location (at any point in time) of any of the Annexure B Assets, save for documents previously produced to the Plaintiffs. 1. Order, pursuant to section 14 of the Civil Procedure Act 2005 (NSW), rule 1.12 of the UCPR and/or the Court's inherent jurisdiction, that the time for service of orders 1 to 4 on the First and Second Defendants (under rule 38.3(3) of the UCPR) be abridged to the date and time that is 24 hours after the making of these orders. 2. Order that orders 1 to 5 above apply subject to any order to the contrary that may be made by the Court in determining any application by the First Defendant or Second Defendant to be excused from complying with those orders on the grounds that the production of any document or documents in accordance with orders 2 and 4 above, or answering questions asked during examinations conducted in accordance with orders 1 and 3 above, may tend to prove that the First Defendant or Second Defendant has committed an offence arising under an Australian law or a law of a foreign country, or is liable to a civil penalty. 3. Costs reserved. 4. Order that the interlocutory process filed by the plaintiffs on 19 June 2023 is otherwise dismissed.

Endnotes

1. [2007] NSWSC 1105.
2. Ibid at [12]-13].
3. Ibid at [22].
4. Ibid at [31].
5. Except for certain land in Queensland, which is not presently relevant to these proceedings.
6. Spelling and grammatical errors in original.
7. See [51] above.
8. Note 1 supra at [18]-[19]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 June 2023