DCM Solar Pty Ltd (in Liquidation) v Marjoribanks

EX TEMPORE Judgment (revised) 1On 7 June 2013 I heard the commencement of argument on an application by the fifth defendant, Sanctuary Energy Pty Ltd, to strike out certain paragraphs of the plaintiff's Commercial List Statement. On that occasion Mr Harris SC appeared for the plaintiff and Mr Smith appeared for the fifth defendant. 2Prior to the hearing on 7 June 2013, the plaintiff had circulated a proposed Second Amended Commercial List Statement. Argument then proceeded on the basis that the substantial question was whether the plaintiff should be given leave to make the amendments proposed in that document. 3The first, fourth and sixth defendants were not represented before me on 7 June 2013. I adjourned the matter for further submissions today in order that they be represented. Mr Ananian-Cooper appears today for those parties. 4The plaintiff is in liquidation. Its liquidator brings these proceedings. Obviously enough, the liquidator has had no personal involvement and have no personal knowledge of the dealings in which the plaintiff company was involved before they were appointed. The liquidator is bringing proceedings for the benefit of the creditors. 5The liquidator alleges that the plaintiff made seven payments totalling some $1.6 million to bank accounts nominated by one of its directors, the first defendant, Mr Marjoribanks. 6In his Commercial List Response filed on 15 March 2013, Mr Marjoribanks admits that he caused the payments to be made to bank accounts nominated by him but makes particular allegations in relation to the sums referred to in subparagraphs 33(b)(i), (ii), (vii) and (x) of the Commercial List Response. Those sums are $40,000, $270,000, $300,000 and $55,000 respectively. 7Arising out of those allegations the liquidators amended the Commercial List Statement to join as parties to the proceedings the fourth defendant, Sanctuary Life Pty Ltd, the fifth defendant, Sanctuary Energy, and the sixth defendant, Ms Nicole Marjoribanks. 8Amongst other things, the liquidator, in their amended pleadings, sought to recover from Sanctuary Energy the four payments to which I have referred on various bases under Pt 5.7B of the Corporations Act 2001 (Cth). 9Sanctuary Energy complained that the liquidator had not pleaded the material facts on which they had relied to support the allegations and pointed to the fact that the liquidator had acknowledged that he was not in a position to do so. 10That led to the circulation by the liquidator of the proposed Second Amended Commercial List Statement in which the liquidator, in effect, repeated the allegations made by Mr Marjoribanks concerning the four payments to which I have referred, and pleaded that if those assertions were correct, then, relevantly, Sanctuary Energy obtained benefits which are liable to be impugned under s 588FF(1)(C) of the Corporations Act and on other bases. 11Mr Smith, on the last occasion, drew my attention to the observations of Emmett J (as his Honour then was; and made in a different context to that before me) in Kugel, in the matter of Charben Haulage Pty Ltd (In Liquidation) [2009] FCA 1039 at [31], that it is not appropriate for liquidators to claim "recovery of moneys pursuant to s588FF until ... satisfied of the substance of a claim". 12In this case, the liquidator does not know whether Mr Marjoribanks' allegations are correct. The plaintiff's case proceeds on the basis that the liquidator does not and cannot verify the correctness of those allegations. 13During argument on the last occasion it seemed to me that there was substance to Mr Smith's contention that the liquidator ought not be permitted to make allegations, the correctness of which he cannot verify. 14However, were I to refuse leave, once Mr Marjoribanks made disclosure of documents and served his evidence, a basis may well emerge where, on any view of the matter, the liquidator could repeat Mr Marjoribanks' allegations against Sanctuary Energy. In that event, the liquidator would likely seek to revive the claim now sought to be agitated. It is for that reason that I suggested that, on 7 June 2013, the matter be adjourned in order that the first defendant could be heard. 15I have now heard argument as to the appropriate way for the matter to proceed. In the course of that argument Mr Ananian-Cooper has very properly and candidly accepted that there are some shortcomings in the manner in which Mr Marjoribanks currently pleads his case in relation to the four payments to which I have referred. 16In particular, I am told that there is now little controversy about the payment of $40,000 alleged in par 33(b)(i). The pleading in respect of that amount is to be amended by deletion of particular words discussed in argument. So far as the pleadings concerning the payments referred to in par 33(b)(ii) and par 33(b)(vii), those pleadings proceed upon the basis of an allegation of an "understanding". It seems to me that in order to make Mr Marjoribanks' claim about those matters clear, he must plead, at least, the matters, facts and circumstances on which he relies to support the contention that there was the "understanding" to which he contends. That may involve pleading agreements. So far as concerns the payment referred to in par 33(b)(x), wrapped up within that pleading is, it seems to me, an allegation of an agreement involving, amongst other parties, the fifth defendant, Sanctuary Energy. That pleading will need to be amended in order to make clear on what facts, matters and circumstances Mr Marjoribanks relies. 17The first order I propose to make is that the first, fourth and sixth defendants file an amended response to clear up those pleading matters. 18In the unusual circumstances of this case I also think it is appropriate that Mr Marjoribanks now serve all the evidence upon which he relies in relation to the payments referred to in par 33(b) of his Commercial List Response, including the four payments to which I have referred. 19I am also satisfied that, for the purpose of Practice Note SC Eq 11, exceptional circumstances exist which necessitate disclosure at this stage. Those exceptional circumstances arise from the matters set forth above and the desirability of clearing up, now, whether the liquidators can appropriately proceed against Sanctuary Energy by repeating, and adopting, Mr Marjoribanks' case. 20For the moment I do not propose to deal further with the plaintiff's application for leave to amend, nor do I propose to require the fifth defendant to plead to the current iteration of the plaintiffs' case. Those matters can be dealt with when the matter is brought back. 21Mr Harris submits that not only should the first defendant give further disclosure but that the fourth, fifth and sixth defendants should give further disclosure. Mr Harris has provided me with a document setting out the disclosure that he seeks. I am satisfied that I should make the orders Mr Harris seeks. 22Insofar as Mr Harris seeks disclosure now, not only from the first, fourth and sixth defendants, but also from the fifth defendant, I am satisfied that a basis has been made out for that exceptional order to be made for two reasons. One is that the material before me suggests that the fifth defendant is, or may be, a party to agreements which may be relevant to the circumstances relied on by the first defendant concerning the four payments involved. Further, there is a basis to suggest that an individual, Mr Alex Brasier, has been involved in these payments, not only on behalf of the first and fourth defendants but also on behalf of the fifth defendant. I propose to make the disclosure orders that Mr Harris has sought. 23I make the following orders: - (1)Direct that the first, fourth and sixth defendants file a further list response dealing with the four payments referred to in subparagraphs 33(b)(i)(ii)(vii) and (x) of the Joint Commercial List Response of 15 March 2013 by 5 July 2013. (2)Direct that the first, fourth and sixth defendants serve all evidence on which they rely concerning the payments referred to in subparagraph 33(b) of the Joint Commercial List Response by 16 August 2013. (3)Direct that the first, fourth, fifth and sixth defendants make disclosure of the documents referred to in the document which I have initialled, dated today, and placed with the papers, by 16 August 2013. (4)Adjourn these proceedings and the balance of the motion for further directions before me on 21 August 2013 at 9.30am. (5)Grant liberty to the first, fourth and sixth defendants to apply on short notice concerning the categories of disclosure. (6)Reserve the costs of today.