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[2018] FCA 1524
Federal Court of Australia
2018-10-09
Farrell J
Original judgment source is linked above.
FARRELL J 1 By an interlocutory process filed on 24 September 2018, Graeme Beattie in his capacity as liquidator of Control Rail Pty Limited (in liq) (Company) seeks an order pursuant to s 530C of the Corporations Act 2001 (Cth), that the Court issue a warrant authorising Mr Beattie to search and seize property, books and records of the Company located in premises occupied by Blacktown Storage King. 2 In support of his application, Mr Beattie relies on his affidavits filed on 6 February 2018 and 24 September 2018 and the affidavit of his solicitor, Mr Bruce Lum, filed on 24 September 2018. The Company was placed in liquidation by an order of this Court on 20 May 2016. 3 Section 530C of the Corporations Act provides as follows: 530C Warrant to search for, and seize, company's property or books (1) The Court may issue a warrant under subsection (2) if: (a) a company is being wound up or a provisional liquidator of a company is acting; and (b) on application by the liquidator or provisional liquidator, as the case may be, or by ASIC, the Court is satisfied that a person: (i) has concealed or removed property of the company with the result that the taking of the property into the custody or control of the liquidator or provisional liquidator will be prevented or delayed; or (ii) has concealed, destroyed or removed books of the company or is about to do so. (2) The warrant may authorise a specified person, with such help as is reasonably necessary: (a) to search for and seize property or books of the company in the possession of the person referred to in subsection (1); and (b) to deliver, as specified in the warrant, property or books seized under it. (3) In order to seize property or books under the warrant, the specified person may break open a building, room or receptacle where the property is or the books are, or where the person reasonably believes the property or books to be. (4) A person who has custody of property or a book because of the execution of the warrant must retain it until the Court makes an order for its disposal. 4 In their affidavits, Mr Beattie and Mr Lum depose to extensive attempts to obtain the books and records of the Company. It is Mr Beattie's evidence that the defendant has been prosecuted by ASIC for contraventions of s 475 and s 530A of the Corporations Act, that is, failure to provide a report as to affairs in relation to the Company and failure to provide the Company's books and records to the liquidator. The defendant was convicted of those offences in the Local Court on 15 August 2017 and fined $11,000. 5 The affidavit sworn by Mr Lum sets out the most recent attempts to obtain the books and records of the Company. Those attempts include emails and a telephone call between Mr Lum and the defendant on 18 September 2018. Relevantly, the defendant told Mr Lum that he had received but not opened letters and emails relating to the proceedings commenced by Mr Beattie by an application filed on 6 February 2018 whereby Mr Beattie seeks relief under s 588M(2) of the Corporations Act. The conversation then proceeded as follows: [Mr Lum]: In an earlier email to me you said you had the books and records of the Company and that the assets of the Company were in a storage facility. Is that still the case? Defendant: Yes. The books and records of the Company and the assets of the Company are in two storage lockers at Blacktown Storage King. They are in my mother's name, Kathleen Gray. I haven't been there for a couple of years but I believe they are paid up to date. I am not sure where the keys are but will try and find them. [Mr Lum]: Do you consent to the liquidator having access to the books and records and assets of the Company? Defendant: Yes. I will look for the keys. If you do not hear from me by 1 pm tomorrow, give me a call. [Mr Lum]: Thank you. 6 Mr Lum deposed to a number of attempts between 18 and 20 September 2018 to contact the defendant without success. 7 It is notable that the defendant has advised Mr Lum that the books and records and assets of the Company are at storage lockers in the defendant's mother's name. I note the requirement of s 530C(2), that the warrant relates to materials in the possession of the defendant having regard to the definition of "possession" in s 9 of the Corporations Act as explained in s 86: A thing that is in a person's custody or under a person's control is in the person's possession. 8 I am satisfied that the books and records and assets of the Company are, relevantly, in the defendant's possession. 9 Mr Lum has drawn to the Court's attention the decision in Whitemore Holdings Ltd (in liquidation) [2004] FCA 806 at [9] and [10]. The Court found that there had been a persistent pattern of non-cooperation and evasion sufficient to satisfy the requirements of s 530C(1). I am satisfied that a similar pattern applies in this case. 10 Mr Lum has also drawn to my attention the decision of Finkelstein J in Vartelas v Kyriakou [2009] FCA 1489. I am satisfied that it would be appropriate to authorise the issue of a warrant substantially in the form of that authorised in that case. 11 Accordingly, I will make an order directing the District Registrar to issue a warrant to Mr Beattie in a form which I will settle in chambers. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell.
Beattie
Gray, in the matter of Control Rail Pty Limited