Curtis v NID Pty Ltd

NAME AND ADDRESS OF APPLICANT'S LAWYERS The prospective applicant's lawyers are: Bransgroves Lawyers Level 13, 179 Elizabeth Street SYDNEY NSW 2000 Telephone: (02) 9221 9522 Email: Ingrid.P@bransgroves.com.au ANNEXURE B No. 729 of 2015 Federal Court of Australia District Registry: New South Wales Division: General Platinum Mortgage Securities (Vic) Limited ACN 158 339 372 as the Responsible Entity for the Platinum First Mortgage Income Fund ARSN 163 188 565 Prospective Applicant

PENAL NOTICE TO: Anthony John Downey of XXXXXXXXXXXXXXXXXXXXXXXXXXXX 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: Anthony John Downey of XXXXXXXXXXXXXXXXXXXXXXXXXXXX This is a 'freezing order' made against you on 23 June 2015 by Justice Flick 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 4:00 pm on Tuesday 23 June 2015.
2. Subject to the next paragraph, this order has effect up to and including midday on 26 June 2015 ('the Return Date'). On the Return Date at 10:15 am on 26 June 2015 there will be a further hearing in respect of this order before Justice Flick.
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) 'applicant', if there is more than one applicant, includes all the applicants; (b) 'you', where there is more than one of you, includes all of you and includes you if you are a corporation; (c) 'third party' means a person other than you and the applicant; (d) 'unencumbered value' means value free of mortgages, charges, liens or other encumbrances.
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 ASSETS 6. (a.) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia ('Australian assets') up to the unencumbered value of AUD$3,000,000 ("the Relevant Amount"). (b) If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount. 7. For the purposes of this order, (1) your assets include: a. all your assets, whether or not they are in your name and whether they are solely or co-owned; b. any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions); and c. the following assets in particular: (i) any money in account XXXXXX maintained with the National Australia Bank in the name of Anthony John Downey at its XXXX XXXXXX branch BSB XXXXX; and, (ii) any money in another account maintained with National Australia Bank in the name of Anthony John Downey. (2) the value of your assets is the value of the interest you have individually in your assets.

PROVISION OF INFORMATION 8. Subject to paragraph 9, you must: a. at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing of all your assets in Australia, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets; b. within 1 working day after being served with this order, swear and serve on the applicant an affidavit setting out the above information. 9. a. This paragraph (9) applies if you are not a corporation and you wish to object to complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that you: (i) have committed an offence against or arising under an Australian law or a law of a foreign country; or (ii) are liable to a civil penalty. b. This paragraph (9) also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively: (i) have committed an offence against or arising under an Australian law or a law of a foreign country; or (ii) are liable to a civil penalty. c. You must: (i) disclose so much of the information required to be disclosed to which no objection is taken; and (ii) prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and (iii) file and serve on each other party a separate affidavit setting out the basis of the objection.

EXCEPTIONS TO THIS ORDER 10. This order does not prohibit you from: a. paying up to $1,200 per week on your ordinary living expenses; b. paying up to $30,000 on your reasonable legal expenses; c. 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 d. in relation to matters not falling within (a), (b) or (c), 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, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation. 11. You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant 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 applicant and you, and the Court may order that the exceptions are varied accordingly. 12. a. This order will cease to have effect if you: (i) pay the sum of $3,000,000 into Court (or if Silvergum Capital Pty Ltd ACN 169 621 998 pays that sum into Court); or (ii) pay that sum into a joint bank account in the name of your lawyer and the lawyer for the applicant as agreed in writing between them; or (iii) provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court. b. Any such payment and any such security will not provide the applicant 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 applicant notice of that fact. COSTS 13. The costs of this application are reserved to the Court hearing the application on the Return Date. PERSONS OTHER THAN THE APPLICANT AND RESPONDENT 14. 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. 15. 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 APPLICANT (1) The applicant undertakes 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 applicant will file and serve upon the respondent 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 applicant at the hearing when the order was made: (i) affidavits (or draft 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, or, if none was filed, any draft originating process produced to the Court. (3) As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it. (4) The applicant will pay the reasonable costs of anyone other than the respondent 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 applicant 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 applicant 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 applicant 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 respondent or the respondent's assets. SCHEDULE B AFFIDAVITS RELIED ON Name of deponent Date affidavit made Mark Gerard Popplewell 22 June 2015

NAME AND ADDRESS OF APPLICANT'S LAWYERS The prospective applicant's lawyers are: Bransgroves Lawyers Level 13, 179 Elizabeth Street SYDNEY NSW 2000 Telephone: (02) 9221 9522 Email: Ingrid.P@bransgroves.com.au

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 729 of 2015

PLATINUM MORTGAGE SECURITIES (VIC) LIMITED ACN 158 339 372 AS THE RESPONSIBLE ENTITY FOR THE PLATINUM FIRST MORTGAGE INCOME FUND ARSN 163 188 565

JUDGE: FLICK J DATE: 23 JUNE 2015 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 Presently before the Court as a duty matter is an application for a "freezing order" pursuant to Division 7.4 of the Federal Court Rules 2011 (Cth). 2 The Applicant is Platinum Mortgage Securities (Vic) Limited ("Platinum"). Orders are sought against Mr Anthony John Downey and Silvergum Capital Pty Ltd ("Silvergum"). The application first came before the Court yesterday afternoon but was stood over for further hearing this morning. Platinum proceeds ex parte. 3 Platinum is the holder of an Australian Financial Services Licence. 4 Mr Downey is a former director of Platinum. He was removed from office on 3 June 2015. He was removed from office by the remaining three directors of Platinum by reason of his involvement in setting up another company in competition with Platinum. He is now a director of Silvergum. 5 It would appear that in November 2014 Mr Downey was involved in the drafting of a document which stated in part as follows (without alteration): The Opportunity Silvergum Capital Pty Ltd ("Silvergum") is the appointed investment manager of the Silvergum First Mortgage Income Fund ("the Scheme"), of which Platinum Mortgage Securities (Vic) Ltd is the Responsible Entity holding the Australian Financial Services License. The Australian Financial Services Licence would allow it to operate a Managed investment Scheme and deal in Mortgages and Basic Deposit products. Silvergum, as the investment manager, is responsible for the Scheme's investments and operations. We believe that the product and services are not only attractive to local Australian investors, but also investors under the Significant Investor Visa or Sponsored Investor Visa. Those statements are false. It would also appear that on 1 June 2015 Mr Downey received an "investment amount of $3,000,000". Those monies had been received from Ms Wu Lee Li-Lings and were paid in support of an application for a Significant Investor Visa. On 1 June 2015 Mr Downey on Platinum letterhead forwarded to Ms Li-Lings a "trust account receipt for your records". On 11 June 2015, namely upon a date after he had been removed as a director of Platinum, Mr Downey was in e-mail communication with an officer of Westpac bank seeking advice as to "an appropriate product" in which the $3,000,000 could be invested. Platinum has no knowledge of the payment of monies by Ms Li-Lings or the receipt of any such monies. Nor is it satisfied that monies have not been received from other persons. 6 Between yesterday afternoon and this morning Platinum has filed Points of Claim which now more helpfully outline the case it seeks to make against Silvergum and Mr Downey. 7 For the purposes of r 7.35(1) of the Federal Court Rules 2011 (Cth) it is concluded that Platinum has established a "good arguable case" as against Mr Downey, including potential contraventions of s 601FD of the Corporations Act 2001 (Cth). It is also concluded for the purposes of that rule that Platinum has established a "good arguable case" against Silvergum, including being an entity involved in contraventions of s 601FD. The threshold for establishing a "good arguable case", it has been said, is a "very low one": Curtis v NID Pty Ltd [2010] FCA 1072 at [6] per Edmonds J. 8 For the purposes of r 7.35(4)(a), the Court is "satisfied" that there is a "danger" that any judgment against both Mr Downey or Silvergum will be wholly or partly unsatisfied if the orders as now sought are not made because assets may be removed from Australia or disposed of. The "course" embarked upon by Mr Downey, it is concluded, is "objectively speaking, calculated to have that effect": Curtis v NID Pty Ltd [2010] FCA 1072 at [10]. There is no need, however, to establish a "positive intention" on the part of a respondent "to frustrate a judgment": Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014 at [10] per Kenny J. The Court need not "be satisfied that the risk of dissipation is more probable than not; and there does not necessarily need to be evidence of any intention to dissipate": Deputy Commissioner of Taxation v Chemical Trustee Limited (No 4) [2012] FCA 1064 at [23] per Perram J. 9 As a matter of discretion, it is concluded that the orders sought should be made. In addition to such facts as have been found to constitute a "good arguable case" as against both Mr Downey and Silvergum, reference may also be made to the deletion by Mr Downey of all emails sent and/or received using his Platinum email account at some point of time between 3 and 12 June 2015. Platinum was only able to retrieve some of those emails as recently as last week. There has been no delay on the part of Platinum in seeking the present orders. 10 The solicitor appearing for Platinum gave undertakings in accordance with Practice Note CM 9. 11 Such further orders as are sought in the Urgent Application are stood over for further mention at 10.15 am on 26 June 2015. 12 Orders 1 and 2 as sought in the Urgent Application as filed on 23 June 2015 should be made together with an order that all the orders should be entered forthwith. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.