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[2016] FCA 449
Federal Court of Australia
2016-04-29
Middleton J
Original judgment source is linked above.
ORDERS VID 1199 of 2013 IN THE MATTER OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) ANDREW REGINALD YEO AND GESS MICHAEL RAMBALDI (IN THEIR CAPACITY AS LIQUIDATORS OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) Applicants
JUDGE: MIDDLETON J DATE OF ORDER: 29 April 2016
SCHEDULE 2 LETTER OF REQUEST Mme Sophie Thorens-Aladjem Tribunal Civil Tribunal de Premiere Instance Place de Bourg-de-Four 1 Case Postale 3136 1211 Geneva Switzerland Dear Judge, IN THE MATTER OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) ACN: 076 403 542 Case Number: VID 1199/2013 The Federal Court of Australia hereby requests the Tribunal Civil, Tribunal de Premiere Instance, Geneva to assist this court and to act in aid of and to be auxiliary to this court in respect of the winding up of Rennie Produce (Aust) Pty Ltd (in Liquidation) (ACN 076 403 542) by making orders, to the extent that it has jurisdiction to do so, as follows:
The Hon Justice John Eric Middleton A Judge of the Federal Court of Australia
ORDERS VID 1199 of 2013 IN THE MATTER OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) ANDREW REGINALD YEO AND GESS MICHAEL RAMBALDI (IN THEIR CAPACITY AS LIQUIDATORS OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) Applicants
JUDGE: MIDDLETON J DATE OF ORDER: 29 April 2016
ORDERS VID 1199 of 2013 IN THE MATTER OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) ANDREW REGINALD YEO AND GESS MICHAEL RAMBALDI (IN THEIR CAPACITY AS LIQUIDATORS OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) Applicants
JUDGE: MIDDLETON J DATE OF ORDER: 29 April 2016
The Hon Justice John Eric Middleton A Judge of the Federal Court of Australia
ORDERS VID 1199 of 2013 IN THE MATTER OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) ANDREW REGINALD YEO AND GESS MICHAEL RAMBALDI (IN THEIR CAPACITY AS LIQUIDATORS OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) Applicants
JUDGE: MIDDLETON J DATE OF ORDER: 29 April 2016
The Hon Justice John Eric Middleton A Judge of the Federal Court of Australia
ORDERS VID 1199 of 2013 IN THE MATTER OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) ANDREW REGINALD YEO AND GESS MICHAEL RAMBALDI (IN THEIR CAPACITY AS LIQUIDATORS OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) Applicants
JUDGE: MIDDLETON J DATE OF ORDER: 29 April 2016
The Hon Justice John Eric Middleton A Judge of the Federal Court of Australia
ORDERS VID 1199 of 2013 IN THE MATTER OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) ACN: 076 403 542 ANDREW REGINALD YEO AND GESS MICHAEL RAMBALDI (IN THEIR CAPACITY AS LIQUIDATORS OF RENNIE PRODUCE (AUST) PTY LTD (IN LIQUIDATION) (ACN 076 403 542) Applicants
JUDGE: MIDDLETON J DATE OF ORDER: 29 April 2016
The Hon Justice John Eric Middleton A Judge of the Federal Court of Australia
INTRODUCTION 1 The Applicants in this proceeding seek orders in this application, which are broadly as follows: (a) An order that the Applicants have leave to serve the interlocutory application dated 23 March 2016 on the United Bank of Mizrahi (Israel) (now Mizrahi Tefahot Bank Ltd) of 7 Jaboutinsky St, P.O.B. 3450, Ramat Gan 52136, Israel ('United Mizrahi Bank') in accordance with the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965 ('Hague Convention'); (b) An order pursuant to s 597(9) of the Corporations Act 2001 (Cth) (the 'Act'), that certain overseas financial institutions by their respective proper officer, produce or cause to be produced certain documents to the Federal Court of Australia; (c) A direction, pursuant to s 581(4) of the Act, that the Court send a letter to courts in Hong Kong, New York and Geneva requesting that those courts act in aid of the orders pursuant to s 597(9) of the Act made by this Court on both 14 August 2015 and 29 April 2016; (d) An order that the Applicants have leave to uplift, inspect and copy those documents produced pursuant to s 597(9) of the Act; (e) An order that the Applicants pay the costs of compliance with the above orders; and (f) An order that time for compliance by, respectively, the Hong Kong and Shanghai Banking Corporation Ltd, DBS Bank (Hong Kong) Ltd, Deutsche Bank (Switzerland) Ltd and Standard Chartered Bank New York, with order 1 of the orders made on 14 August 2015 be extended.
BACKGROUND 2 On 14 August 2015, I made orders in Yeo and Rambaldi (as liquidators), in the matter of Rennie Produce (Aust) Pty Ltd (in liquidation) [2015] FCA 849 (the 'First Orders'), in respect of the production of documents by several foreign financial entities, and subsequently signed letters directed to several foreign courts requesting their aid in enforcing orders in respect of the production of documents. 3 While the application for the First Orders was taking place, further investigations into the examinable affairs of the Rennie Produce (Aust) Pty Ltd (in liquidation) ('RPA') were being conducted. Those investigations resulted in the Applicants making an application for a liquidator's examination of the Australian Federal Police ('AFP'), further to such applications having previously been made. This application was granted by this Court and resulted in a number of further documents being produced. As those documents were examined, it became apparent to the Applicants that they wished to make this (further) application for the production of documents by two other foreign financial entities ('Current Application'). 4 The Applicants formed the view that, to avoid duplicating costs in carrying out the process, at least in Switzerland, they would make, and await the determination of, the Current Application prior to commencing the court processes in the overseas jurisdiction. As such, the Applicants have also sought an extension of time for compliance with order 1 of the orders made on 14 August 2015. 5 The Applicants rely on the affidavits of Andrew Reginald Yeo, a joint liquidator of RPA and a plaintiff in this proceeding, sworn on 11 December 2013 ('First Affidavit'), 21 November 2014, 10 June 2015, 14 August 2015 ('Fourth Affidavit'), 23 March 2016 ('Fifth Affidavit') and on 27 April 2016. 6 In the reasons to the First Orders ('Previous Reasons'), I set out at paragraphs [2]-[5] the relevant background to the Applicants' application for overseas financial institutions to produce the necessary documents to this Court. For the purposes of the Current Application, it is worth restating the following: (a) In his First Affidavit, Mr Yeo deposed that in October 2012 RPA entered into terms of settlement with its former director, Paul Rennie, and related entities (collectively the 'Rennie Parties'). The terms of settlement were premised on the sale of certain businesses and assets of the Rennie Parties, and that the Rennie Parties would, on settlement of that sale, pay the settlement amount, or some of it, to the Applicants. The terms of settlement also provided that, within a certain time, the Rennie Parties would repatriate to Australia any offshore funds held by them (or for their benefit) as at the effective date of the terms of settlement (the 'Effective Date') in excess of $13 million, and divide the repatriated funds between the liquidators and the Rennie Parties. If the Rennie Parties did not repatriate the offshore funds in full, all right, title and interest in any non-repatriated offshore funds were to be assigned to RPA. That right, title and interest would be an asset of RPA in the liquidation. (b) Mr Yeo also deposed that the Rennie Parties had failed or refused to cooperate with the liquidators to establish that all offshore funds held by or for the benefit of the Rennie Parties had in fact been repatriated. Mr Yeo considered it necessary to conduct examinations to determine what offshore funds were held by or for the benefit of the Rennie Parties as at the Effective Date, and the quantum and whereabouts of any non-repatriated offshore funds (if any), being assets of RPA in the winding up, and forming part of the examinable affairs of RPA. 7 On 5 December 2014, this Court issued a summons for the examination of Mohammed Hussain of the AFP ('First AFP Summons'). 8 On 20 January 2015, Mr Hussain produced various documents pursuant to the First AFP Summons. One such document was a report that listed each of the items seized by the AFP, pursuant to various search warrants executed during 2010 and 2012 ('Property Seizure Report'). 9 Mr Yeo swore his Fourth Affidavit supporting an application for further summons ('Second AFP Summons') to be issued to Mr Hussain, in light of the information contained in the Property Seizure Report. Mr Yeo deposed to various reasons why production was sought of certain documents detailed in the Property Seizure Report and in the possession of the AFP. 10 On 20 August 2015, this Court issued the Second AFP Summons. 11 On 23 September 2015, Mr Hussain produced various documents pursuant to the Second AFP Summons. The documents produced by Mr Hussain included documents relating to the following further offshore bank accounts: (a) Account 108356 at United Mizrahi Bank ('Offshore account 9'); (b) Account 105772 at United Mizrahi Bank ('Offshore account 10'); and (c) Account 0233-671793.40G Master No. 0233-671793 at UBS AG (Switzerland) ('Offshore account 11') (together, the 'Offshore Accounts'). 12 In light of this, in his Fifth Affidavit, Mr Yeo deposed that: (a) on 4 February 2014, the Court issued a summons to Mr Rennie which required him to produce to the Court '[d]ocuments evidencing the amount of Offshore Funds (as defined in the Deed of Settlement dated 3 September 2012) held by or for the benefit of the Rennie Parties (as defined in the Deed of Settlement) and/or their related entities as at 4 October 2012.' However, in answer to this summons, Mr Rennie did not produce any bank statements for Offshore Accounts 9 or 11 as at 4 October 2012; (b) during the course of Mr Yeo's investigations into the affairs of RPA, he identified facts in relation to the Offshore Accounts that strongly indicate that these accounts were controlled by the Rennie Parties or their associates and may hold offshore funds that are assets in the liquidation of RPA; (c) an order for the production of the documents that are the subject of the Current Application, by the foreign financial institutions in question, would assist the liquidators in conducting the ongoing examinations of Mr Rennie into the quantum and whereabouts of offshore funds that are assets in the liquidation of RPA; and (d) the liquidators have received legal advice from solicitors in each of the foreign jurisdictions in question, which advice leads them to believe that if the orders sought were made by the Court, those orders would likely be enforced by the courts in each of the jurisdictions in question.
Sections 597(9) and 581(4) of the Act 13 Section 597(9) of the Act provides that: The Court may direct a person to produce, at an examination of that or any other person, books that are in the first mentioned person's possession and are relevant to matters to which the examination relates or will relate. 14 Section 581(4) of the Act provides that: The Court may request a court of an external Territory, or of a country other than Australia, that has jurisdiction in external administration matters to act in aid of, and be auxiliary to, it in an external administration matter. 15 I set out at paragraphs [6]-[15] of the Previous Reasons the legal principles relevant to the application of ss 597(9) and 581(4) of the Act. Such principles also apply in respect of the Current Application.
Service out of Australia 16 The Applicants seek leave to serve the Current Application on the United Mizrahi Bank in accordance with the Hague Convention. 17 Rule 10.44(1) of the Federal Court Rules 2011 (Cth) (the 'Rules') provides for a party to apply for leave to serve a document filed in or issued by the Court, other than an originating application, on a person in a foreign country in accordance with the Hague Convention. Pursuant to r 10.44(2) of the Rules, an application under sub-r (1) must be accompanied by an affidavit that relevantly states: the name of the foreign country where the person to be served is or is likely to be; the proposed method of service; and that the proposed method of service is permitted by the Hague Convention. 18 In Clifton (Liquidator), in the matter of Solar Shop Australia Pty Ltd (In Liquidation) [2014] FCA 891, White J granted leave to serve examination orders previously issued under s 596B of the Act in respect of two companies incorporated in Germany and China respectively, outside of Australia and in accordance with the Hague Convention. His Honour acknowledged that circumstances may exist, such as where the principle of international comity is applied, where leave should not be granted, notwithstanding that the requirements of r 10.44(2) had been complied with. However, his Honour went on to find that: [11] …the principle of international comity should not preclude the grant of leave in the present case. [12] The present application is for leave to serve the orders of this Court in accordance with the Hague Convention to which Australia subscribed with effect from 1 November 2010. Both Germany and China have also acceded to the Hague Convention. They can, therefore, be taken to have accepted the course of action contemplated by the present application, namely, the issue of a letter of request by the Registrar of this Court under r 10.64 to the Central Authority in their countries. Their sovereignty will not be infringed by the forwarding of the request to the Central Authority and, if that Central Authority considers that some infringement of their country's sovereignty is involved, it may refuse to effect that service. 19 The reasoning applied by White J in that case is equally apposite in the present case, as Israel is also a signatory to, and has ratified the Hague Convention. 20 Further, in Donnelly (as liquidator), in the matter of Advance Finances Pty Limited (in liq) [2013] FCA 514, Farrell J, in granting leave pursuant to r 10.44 for notices to produce to be served outside Australia, noted (at [30]) that '[t]he notices to produce are in a common form and would be unremarkable in the context of the conduct of appropriate enquiries by a liquidator in Australia'.
Section 597(9) of the Act 21 For the reasons set out in the Fifth Affidavit of Mr Yeo, the documents sought in the Current Application are relevant to the examinations being conducted by the Applicants and, in particular, to identifying the quantum and whereabouts of funds that may have been transferred offshore by the Rennie Parties and their related entities but not repatriated. Any such funds would be an asset of the RPA in liquidation by reason of the terms of settlement entered into by the parties. 22 The documents in respect of which production is sought are documents in the possession of financial institutions. The documents will assist the liquidators in identifying the quantum and whereabouts of offshore funds belonging to RPA, and in conducting further examinations of Mr Rennie.
Section 581(4) of the Act 23 In the Previous Reasons, I outlined (at [13]-[15]) the three factors to be considered when determining whether the requirements of s 581(4) of the Act have been satisfied. First, the matter must be an "external administration matter"; second, there must be some good substantive reasons for the request; and third, there must be some utility in the request. 24 As to the first consideration, I accept that the conduct of liquidators' examinations under ss 596A and 596B of the Act (being examinations by the liquidators of a company being wound up in insolvency) into the examinable affairs of that company in the Current Application, is an "external administration matter" for the purposes of s 581(4) of the Act. 25 As to the second consideration, for the reasons set out above, the order for production of documents from the financial institutions in question will aid the liquidators in identifying assets of the company (in the form of offshore funds not repatriated). In the Current Application, the financial institutions in question are resident in Israel and Switzerland and are therefore not directly compellable under Australian law. I accept that there is a good substantive reason for the requests. The requests relate to documents which are material to, and necessary for, the examination of the affairs of RPA, and will assist in the further examination of Mr Rennie. The discovery of documents sought from the relevant institutions is specific, and is not in the nature of a fishing expedition. As I have indicated, the documents sought are relevant, and appropriately requested in relation to identifying the quantum and whereabouts of funds that may have been transferred offshore by the Rennie Parties and related entities and not repatriated. In this regard, I accept the evidence put forward in the affidavits of Mr Yeo. 26 As to the third consideration, the Applicants have obtained advice from solicitors in both Israel and Switzerland to the effect that the relevant request is likely to have some utility, which I accept. 27 As noted in the Previous Reasons, paragraph 3 of the proposed letters of request is based on concerns held by Lindgren J in Elderslie Finance Corporations Ltd v Newpage Pty Ltd (No 5) [2007] FCA 961. This paragraph is designed to ensure that the foreign courts are being asked to do no more than this Court could do within the territorial jurisdiction of Australia, and no more than the foreign courts could do if RPA had been incorporated in those foreign jurisdictions.
Service under the Hague Convention 28 The Applicants rely on the affidavit of Andrew Schnaider affirmed on 14 April 2016 which relevantly states that: (a) service of the Current Application is or is likely to take place in Israel; (b) the proposed method of service is to be by means of a request from a Registrar of the Federal Court of Australia to the Central Authority of Israel made in accordance with rr 10.64 and 10.65 of the Rules, which request is to be given effect by the Central Authority of Israel; and (c) the proposed method of service is permitted by Articles 3 and 5 of the Hague Convention. 29 In light of this, and as Israel is a signatory to, and has ratified the Hague Convention, I will grant leave for the Current Application to be served out of Australia in accordance with Hague Convention.
CONCLUSION 30 On the basis of the reasons above, I make the orders sought by the Applicants in the Current Application. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton.
Elderslie Finance Corporation Limited
Newpage Pty Ltd No 5)