C.3. Is at least one of the conditions in subparagraphs (i) to (iv) of s 579E(1)(b) of the Act satisfied?
18 Section 579E(1)(b)(iv) of the Act is satisfied if:
(iv) one or more companies in the group own particular property that is or was used, or for use, by any or all of the companies in the group in connection with a business, a scheme, or an undertaking, carried on jointly by the companies in the group.
19 In Kirby Street at [40], Barrett J stated:
The questions for the court are thus whether, at the time of the court's decision, particular property "is or was used, or for use" in a relevant way and is property that "one or more companies in the group own". The inquiry into use directs attention to both the present (whether the property "is ... used, or for use") and the past (whether the property "was used, or for use"). The inquiry into ownership, by contrast, concentrates wholly on the present - whether one or more of the relevant companies "own" the property at the time of the court's decision.
20 The Court must, therefore, ask first, whether, at the time of its decision, particular property "is or was used, or for use" in a relevant way, and second, is it property that "one or more companies in the group own".
21 With respect to whether the property was used, or was for use, "in connection with a business, scheme or undertaking carried on jointly" by the defendants, Barrett J stated in Kirby Street at [26]:
In Allen v Feather Products Pty Ltd (above) at [14] to [19], I expressed the opinion that, if several companies, by arrangement with one another, contributed part of what was required to carry on a single business, the business each element of which came from one or more of them might properly be characterised as a business "carried on jointly" by all of them. "Jointly" does not connote merely action in unison but extends also to circumstances in which there is co-ordinated or co-operative action, with the separate acts of each participant complementing or supplementing acts of the others.
22 I am satisfied that the requirement in s 579E(1)(b)(iv) of the Act is satisfied for the following reasons.
23 First, "particular property" is owned by "one or more" of the defendants. The following defendants are currently the registered proprietors of real property:
(a) the twenty sixth defendant, Oger Holdings (Aust) Pty Ltd (in liquidation);
(b) the twenty seventh defendant, Hassall Developments Pty Ltd (in liquidation) (receivers and managers appointed); and
(c) the twenty ninth defendant, Goldenia Developments Pty Ltd (in liquidation) (receivers and managers appointed).
24 Second, property owned by one or more of the defendants was used, or was for use, by any or all of the companies in the group as security for facility agreements between the Wingate Group and certain companies in the group, in connection with a business, scheme or undertaking carried on jointly by the defendants, being the four main businesses carried out by the Merhis Group:
(a) property development;
(b) property investment;
(c) construction; and
(d) structural steel framing manufacturing.
25 Previously property owned by one or more of the defendants was also used as security for facility agreements between the National Australia Bank (NAB) and certain companies in the Merhis group, in connection with the four main businesses carried out by the Mehri Group. These security arrangements included:
(a) a "Guarantee and Indemnity" for the "Merhis Group" dated 6 August 2013 pursuant to which each of the second to sixth defendants, twenty third and twenty fifth defendants granted various forms of security to NAB, including general security deeds, real property mortgages, debentures and goods mortgages;
(b) a "Global Variation Deed" for the "Merhis Group" dated 14 February 2014 between the NAB and all of the defendants referred to in the previous sub-paragraph, together with the tenth defendant;
(c) a "Letter of Amendment" dated 2017 to several defendants concerning amendments to certain NAB facility agreements;
(d) a NAB document dated 3 March 2015 and styled "Property Client Evaluation - Investment / Term Debt", which refers to several of the defendants and NAB facility agreements and describes the four principal businesses conducted by the Mehri Group; and
(e) a NAB document dated 28 April 2015 and styled "Property Client Evaluation - Investment / Term Debt", which refers to the use of property owned by one or more of the defendants as security for two potential NAB facility agreements with the eighteenth defendant.
26 The previous use of property owned by the defendants as security for facility agreements between NAB and certain companies in the group, in connection with the four main businesses carried out by the Mehri Group supports the drawing of an inference that property currently owned by defendants is property that is held "for use" by any or all of the defendants in connection with the businesses carried on by the Mehri Group.
27 The property owned by one or more of the defendants was, therefore, used, or was for use, in connection with that business, scheme or undertaking carried on jointly by all of the defendants in that it was used, or was available for use, as security for facility agreements with the Wingate Group. The funding from those facility agreements was used to fund the projects being undertaken by certain defendants, which were part of the business, scheme or undertaking carried on jointly by all of them as members of the Merhis Group.
28 For the foregoing reasons, I am satisfied that the requirement in s 579E(1)(b)(iv) of the Act is satisfied.