Mine & Quarry Equipment P/L (in liq) v. Clout [2001] QSC 412 (1 October 2001)

18 March 1994 said to be for a crusher plant in the amount of $227,000. The second group, invoices 35, 40, 42, 78, 81 and 85 in the amount of $152,651.73, is said to be owing for freight. The third is invoice 84 which is alleged to be

$24,995.90 for "balance outstanding". The fourth claim is made up of invoice 96 said to be $8,300 for a crusher, and invoice 150 said to be $23,000 for a feeder and hopper and the fifth is invoice 189 said to be $2,526.30 for consultancy fees.

[3] The onus lies on the applicant to prove that it is owed the debts which have been rejected by the liquidator. In its statement of claim the applicant relies on the following allegations which it says gives rise to the debts alleged. In paragraph 4 of the statement of claim it says that:

"At all material times there was a commercial relationship between the applicant and [MQE] whereby:-

(a) the applicant would locate and purchase items and mining equipment for the purposes of sale;

(b) [MQE] would sell items and mining equipment on consignment for the applicant."

MEQI said in paragraph 5 of the statement of claim that the following were terms of the relationship between the applicant and MQE:

"(a) that [MQE] would pay to the applicant the costs incurred by the applicant in shipping items of equipment sold by [MQE] on behalf of the applicant;

(c) that [MQE] would pay to the applicant the purchase price of equipment upon its sale."

[4] In response, the liquidator denied that there was such a commercial relationship. In the amended defence, he said:

"4. The respondent denies the allegation in paragraph 4 of the statement of claim and believes that the allegation is untrue because there was no "commercial relationship" between the parties as pleaded therein as a matter of fact. However, the respondent admits that from time to time:-

(a) the applicant would locate and purchase items of mining equipment for the purposes of sale; and

(b) [MQE] would sell items of mining equipment, including equipment located by the applicant, although the respondent does not admit that such sales were always or routinely sold on consignment for the applicant.

5. The respondent denies the allegation in paragraph 5 of the statement of claim and believes that the allegation is untrue because:-

(a) there was no such "relationship" as pleaded in paragraph 4 hereof; and/or

(b) if there were a "relationship", then the matters set out in paragraph 5(a) and (b) were not the terms of the relationship as a matter of fact and the allegations are untrue."

[5] In support of its claim, the applicant filed an affidavit from its solicitor, Darrell Jardine, filed on 29 March 2001 and two affidavits of Gary Francis Robson, filed on 16 May 2001 and 12 June 2001.

[6] On instructions from Gary Robson, Mr Jardine swore that MQEI and MQE entered into an agreement whereby MQEI would supply equipment to MQE on consignment for MQE to on-sell. It was agreed that MQE would be responsible for all the costs associated with the consignment stock, including freight, customs, quarantine, storage and repairs. MQEI loaned monies to MQE and also paid other amounts on its behalf. Gary Robson swore this "arrangement" was entered into in early 1994. He said it was "an oral arrangement based on oral discussions" between himself and Bill Robson.

[7] Gary Robson swore that he is the duly authorised representative of MQEI and authorised to make affidavits on its behalf. MQEI is a company incorporated according to the laws of Vanuatu where it is an international company limited by shares. It is registered as a foreign company in Australia. Gary Robson was the sole director of MQEI from the date of its incorporation on 3 February 1994 until

8 July 1997, when he resigned and entities called Global Nominees Limited and Credit Facilities Limited were appointed as directors in his place. These companies are both companies incorporated in Vanuatu operated by BDO Chartered Accountants in that country. Gary Robson said he is still involved in the day to day operation of MQEI. In fact, it appears that he is effectively the sole controller of the company. He was very evasive in his evidence about the directors and even the shareholders MEQI. He said that he thought he had a written authority to act on behalf of the company but was unable to produce it.

[8] Gary Robson gave a very poor impression in the witness box. Not only was he evasive about the owners and directors of MQEI, a company under his control, he was even evasive about his residential address. He was also evasive about who

kept the books of MQEI. He had no explanation for a number of matters about which one would expect he would know the true situation. For other matters he was unable to produce supporting documentation which must have existed if his evidence was true. Given that this was his opportunity to prove the debts, the failure to produce evidence, either in documentary form or by calling witnesses, must be taken into account in determining whether or not the claims have been satisfactorily established.

[9] The original statutory demands on which these claims are based describe the alleged debts as loans from MQEI to MQE between March 1995 and February 1997 in the amount of $630,243.78 and monies loaned by MQEI to MQE in December 1999 in the amount of $623,238.53. However, as has already been noted, none of the claims in the statement of claim were for monies lent by MQEI to MQE on those or any other dates.

[10] The company that is now in liquidation, MQE, was incorporated on

25 January 1990. Prior to its being wound up on its own petition, Charles William Robson, known as Bill Robson, was its sole director with himself and a company he controls, Bylass Pty Ltd, as the shareholders. It was set up by Gary Robson, his brother Bill Robson and Ron Frieberg. Gary Robson resigned as a director shortly after the incorporation of MQE and moved overseas. He continued to be involved in the affairs of MQE until February 2000 when he had a falling out with his brother, Bill Robson. On 9 March 2000, MQEI was given notice to remove all the stock it stored at MQE's address. In response, on 5 May 2000, MQEI accepted the termination of the long established "consignment arrangement".

[11] MQE was a repairer, reseller and broker of mining and quarry equipment. Equipment would be located and purchased, and if necessary, MQE would attend to its restoration, improvement or incorporation into larger plants, and then on-sell that equipment. Most of MQE's business occurred in Australia. It traded mainly from premises at Tile Street, Wacol, Queensland. The premises at Wacol are owned by Yalgold Pty Ltd which is a company of which Bill Robson is the sole director. It is also in liquidation and the respondent is also its liquidator.

[12] MQE received statutory demands for payment of debts dated 8 June 2000 from MQEI. Although no application was made to set aside the demands, they were disputed. It was as a result of that dispute that Bill Robson instigated proceedings for the winding up of MQE, so that the outstanding matters in dispute could be resolved by the liquidator and because, in view of the claims of MQEI, MQE was possibly insolvent.

[13] MQEI generally imported crushers and ball mills from overseas. It was also engaged in a number of overseas joint ventures in relation to the attempted manufacture of mining and quarry equipment in India, China and other places. MQEI had no permanent place of business. MQE provided most of the office services and support, and Gary Robson used MQE's staff, premises, computer equipment and other office supplies.

[14] I accept that Gary Robson dominated his younger brother, Bill Robson. Although he was not a director or employee of MQE, Gary Robson issued directions to MQE's staff, and in particular in relation to the financial affairs of MQE. In effect,

without any agreement by Bill Robson or any formal position with MQE, Gary Robson took control of much of the financial affairs and other parts of the business of MQE.

[15] Bill Robson mainly managed the domestic purchases, brokerage, reconditioning and sale of mining equipment in Australia, which was the vast majority of MQE's business. However, Gary Robson would direct staff to prepare invoices, engage accountants and other professionals, and would prepare letters on MQE letterhead and direct Bill Robson to sign them. He took over the preparation of invoices and the like, gave directions to the company's accountant and directed MQE staff to arrange for the transfer of MQE funds to himself or MQEI. Bill Robson gave evidence that he felt unable to challenge the actions of Gary Robson and felt intimidated by him.

[16] Bill Robson gave evidence by affidavit sworn on 17 May 2001, that there was never any verbal or written arrangement or understanding entered into between himself and Gary Robson, either personally or in their capacity as directors of MQE and MQEI.

[17] However, this statement by Bill Robson was contradicted in part in an affidavit which he swore on 9 June 2000 in support of the application to wind up MQE. In paragraph 4 he said:

"In or about 1994, an arrangement arose between [MQE] and ...

[MQEI] pursuant to which MQEI would purchase mining equipment from various overseas countries and ship the equipment to Australia to be held by [MQE] in its bond store and on its property and to be sold by [MQE] after payment of customs duties."

This contradiction suggests that Bill Robson is not a particularly reliable witness, although he did appear to be less evasive when cross-examined under oath than his brother, Gary Robson. He gave an adequate explanation of the reason why the word "arrangement" came to be used in spite of the fact that it did not accurately describe the nature of the relationship between the parties. The "arrangement" in any event was not the same as that alleged in the applicant's statement of claim.

[18] Gary Robson's practice, according to Bill Robson, was that Gary Robson would simply do whatever he wished, and would ensure that any necessary documentation was created. He would not consult with Bill Robson or discuss these matters with him. While I do not accept that there was a general arrangement of the type alleged in paragraphs 4 and 5 of the statement of claim, nor do I accept that there was never any consultation by, and discussion between, Gary Robson and Bill Robson.

[19] Bill Robson said and I accept that Gary Robson developed a practice where MQEI would locate and purchase mining equipment off shore. He would then ship that equipment to MQE at its bonded warehouse in Brisbane. Gary Robson had arranged a licence for a bonded warehouse to be obtained in the name of MQE. Bill Robson usually only became aware that it was arriving when shipping agents contacted MQE advising that equipment had landed in Australia. Gary Robson would usually direct company staff to prepare invoices at this time. On occasion, mining equipment would need to be repaired or reconditioned, and MQE would undertake this on Gary Robson's instruction.

[20] Gary Robson would then try to arrange for the sale of the equipment. Only on a very few occasions did he arrange the sale of equipment that had landed in Australia to independent third parties. In fact, most of the equipment that he imported stayed on land owned by Yalgold at Tile Street at Wacol, Queensland. That equipment is still owned by MQEI. Some of the items that were imported by MQEI were purchased by MQE.

[21] From time to time, Gary Robson would instruct MQE's administrative staff, and in particular Linda Mulcahy, to prepare various documents on behalf of MQEI. In particular, she would be told to prepare invoices from MQEI to MQE, and Gary Robson would then instruct her to pay those invoices. He knew from weekly financial statements which he instructed her to send him relating to MQE, when MQE had funds available for payment. This allowed MQEI to receive substantial funds from MQE, which would be paid into MQEI's account in Vanuatu.

[22] The purpose and nature of the loan transactions and the relationship between MQEI and MQE is demonstrated in Bill Robson's affidavit sworn on 17 May 2001 where he said:

"22. In one instance, MQE built a crushing plant. An enquiry for the purchase of a crushing plant came in from the Lihir Gold Mine in Papua New Guinea. When Gary Robson learnt of that enquiry, he started contacting the client and took over negotiations. Ultimately when the plant was sold, even though it was owned and had been constructed by (and at the cost of) MQE, he in fact invoiced the client for the plant on MQEI letterhead for some $780,000.00. The monies were paid by [the] purchaser directly to MQEI. In turn, Gary Robson arranged for MQE to issue an invoice for MQEI for what he deemed to be fair value for the plant, which was in fact $62,000.00 less than the actual outlays incurred in building the plant. By this means, all of the profit on the sale of this plant to the Lihir Gold Mine

23. What this arrangement achieved as I am now aware, was that:-

(a) any profits generated as a result of the purchase, repair or renovation of the mining equipment sought internationally were transferred to MQEI or other companies controlled or associated with Gary Robson;

(b) no Australian Tax would have been paid by MQEI, in respect of such profits;

(c) some of the profits would then be repatriated to Australia in the guise of loans giving the appearance that me, or my companies - Yalgold or MQE were indebted to MQEI or associated companies; and

(d) no Australian Tax would be paid in respect of such loans by MQEI. It has only been during the course of my review of documents as a result of Litigation commenced by companies associated with Gary

Robson that I have come to understand the effect of these transactions."

[23] The liquidator called evidence from Bill Robson and Linda Mulcahy. Ms Mulcahy is a secretary now employed by the new company M & Q Equipment Pty Ltd, whose director is Sandra Robson, the wife of Bill Robson. Bill Robson is employed by that business and has the day to day running of it.

[24] Ms Mulcahy was employed by MQE from 1989 until the date of its liquidation. Bill Robson was the sole director during the time she was employed but she said Gary Robson was frequently present at the premises and gave instructions both personally and by facsimile as to the conduct of the affairs of MQE.

[25] She gave evidence that she did not know of any commercial arrangement between the companies as alleged by Gary Robson. In her affidavit, sworn 17 May 2001, she said:

"4. In Mr Gary Robson's affidavit dated 4 May 2001, he indicates that he would source equipment for MQE. Whilst MQEI in fact shipped a large quantity of equipment over the last several years to MQE, and have used MQE's bonded warehouse at Tile Street, Wacol to store that equipment, very little of that equipment was either sold to or through MQE. Gary Robson also did very little work for the benefit of MQE - such as arranging the sale of its equipment.

5. For example, I have reviewed the records for the financial year ending 30 June 1995. In that year, MQE issued 135 invoices to customers for equipment sold, and only two of those invoices were for equipment sold by Gary Robson.

6. Since 1989 I have been privy to or seen almost all of the incoming or outgoing correspondence of MQE. I have also had access to and seen most of the files of MQE. I have never seen any document recording or referring to a written or verbal arrangement between MQEI and MQE as referred to in paragraph 5 of Gary Robson's affidavit.

7. Indeed, I can recall on numerous occasions (a number of which are in written facsimile instructions in Gary Robson's handwriting) that he instructed me in respect of all contractual or financial details that I was to obtain confirmation of those in writing. There is no such confirmation in respect of the arrangement alleged by Gary Robson. I have never previously been aware that it was alleged that such an arrangement existed."

[26] The liquidator's investigations have not revealed any document which would evidence any such agreement. Mr Clout swore "there is simply nothing in the company records by way of agreement, letter, minute or a note which evidences any such agreement."

[27] His investigations have shown that MQE did have a customs bond warehouse licence, and stock was shipped by MQEI to MQE at that warehouse. Invoices would be issued to MQE by MQEI for that equipment, as that was necessary for customs. However, MQEI has always asserted ownership of the equipment, and there does not presently appear to be any substantial grounds to dispute that ownership.

[28] Mr Clout gives reasons why such an agreement, of which there is no convincing evidence, is also unlikely:

"It would be curious if there was any arrangement between MQE and MQEI in relation to the importation of this stock. In particular, the records of the company reveal MQE only sold stock on behalf of MQEI on a few occasions over the last 10 years. Further, it appears that MQE bought some of that stock from MQEI, but only on approximately half a dozen occasions over the last 10 years. There does therefore not appear to be any valid commercial reason why MQE would pay all of the expenses of MQEI, including freight costs, advertising costs, storage costs, customs duty and the like. Any such arrangement would have been highly unprofitable and uncommercial in my view for MQE."

[29] After hearing the evidence, I have formed the view that Gary Robson was an untruthful witness and that Bill Robson was unreliable, although to a lesser extent. Even Ms Mulcahy appeared partial and so her evidence should be accepted only with circumspection. Documents created by her at Gary Robson's request or insistence appear to be similarly unhelpful in determining the true nature of the financial relationship between the parties. The creation of invoices in this way which were incorporated into MQE's financial records, is not in these circumstances determinative of whether these moneys are owed by MQE to MQEI.

[30] It is necessary, therefore, to examine each claim individually to determine whether

MQEI can prove the debt against the liquidator of MQE.

3 18 March 1994 1 only 42" Primary Joint Crusher Plant complete with Hopper - Feeder - Scraper and Discharge conveyors.

The evidence for this claim is an invoice from MQEI to MQE. The invoice is invoice no 3 dated 18 March 1994 for a crusher plant which is the terms set out above.

[32] In response to a letter from the liquidator on 23 October 2000, the applicant said in relation to this invoice:

"This was for a mobile/portable primary crushing plant fitted with a

42 x 25 Kue Ken Jaw Crusher. The plant went to ANI workshop at Ipswich and it was sold at a gold mine in New South Wales. It was not the case that the equipment was never received. The equipment

comprised two pieces. Invoice 18 ... is for the secondary item. Mr Charles [Bill] Robson sold this item. Both the primary and secondary items were delivered to ANI at Ipswich. Invoice 3 was for the primary piece of equipment and MQEI believes Charles [Bill] Robson invoiced Thompson Plant International for this piece. The primary section was delivered with the secondary section and screening section which was invoiced by others.

Further evidence of the delivery can be seen from the involvement of Mr Paul Stacey. Mr Paul Stacey made contact with a Mr Peter Mayo who worked for ANI (Karribin, Ipswich) at the time of the delivery of the plant from 47 Tile Street, Wacol to ANI's workshops. Mr Mayo advised that the plant was used to crush reject stone for heap leaching at Temora Gold Mine, Temora, New South Wales. The plant was owned by a Western Australian company and they had also purchased a third crusher to add to the circuit. Mr Paul Stacey's handwritten note confirming his discussion is Attachment 4."

[33] Invoice 18, dated 15 November 1994, is addressed to:

"THOMPSON PLANT INTERNATIONAL PTY LTD PO BOX 25

FERNTREE GULLY VIC 3156

AUSTRALIA"

"ONE ONLY SECONDHAND SECONDARY CRUSHING PLANT CONSISTING OF:-

* 1 ONLY 4' STD HEAD SYMONS CONE CRUSHER STAND MOUNTED

* 1 ONLY 6' X 14' X 2 DECK ALLIS CHALMERS SCREEN COMPLETE WITH TOWER & CHUTES

* 1 ONLY 24" X 60'STACKER CONVEYOR

* 1 ONLY 40" X 85'(APPROX) TRANSFER CONVEYOR.

* 1 ONLY 24" X 6'(APPROX) RECRUSH CONVEYOR.

* ALL ELECTRICS INCLUDED

It is noted as having been paid by telegraphic transfer to MQEI on 9 December

[34] Attachment 4, referred to by the applicant, is a copy of a handwritten note which is neither dated or signed. It says, as best it can be deciphered:

"Peter Mayo, "Said"

Plant was crushing reject for heap leaching at Temora Gold Mine. Project finished. Plant may still be there. West Australian Co shall Plant a 4 1/4 cone purchased from Quamin was added to the

existing plant. Plant location --15 Kilometers north of Temora turn off by the silos. Nearest major town to Temora is Wagawaga [sic]."

[35] The liquidator, clearly still unsatisfied as to the veracity of this claim, sought further information on 14 February 2001 saying:

"The Director of the Company claims that there was never a purchase order and he maintains that this crusher was never delivered. Accordingly please provide a copy of the delivery docket evidencing that this piece of equipment was delivered to MQE or pursuant to the directions of MQE."

[36] On 26 February 2001, the solicitors acting on behalf of the applicant replied:

"1. The Director's assertion is completely at odds with the evidence which we have provided in our response to the letter from Clout & Associates dated 23 October 2000

(which we provided with our client's Proofs of Debt). Mr Peter Mayo, formerly of ANI, confirmed with Mr Paul Stacey that the plant went to ANI workshop at Ipswich and it was sold to a gold mine in New South Wales. If you require further confirmation of this, then we suggest that you contact ANI to confirm that the item of equipment referred to in this Invoice was in fact delivered to it. What does the Director say about Invoice 18 which was for the secondary item delivered to ANI at Ipswich as well? It would be nonsensical for the Director to suggest that the secondary item was delivered but not the primary piece of equipment.

2. Our client does not have at its disposal a copy of the delivery docket evidencing that this piece of equipment was delivered to MQE or at its direction. Those records were held in files left by Mr Gary Robson in the office of MQE. Those files have now been removed by either the Director or persons associated with him.

3. Invoice No. 3 was issued back on 18 March 1994. It was only when our client lodged its Proof of Debt that the Director queried this Invoice. One would have thought that if he had a genuine dispute about the Invoice, he would have raised it at the time the Invoice was issued."

[37] On 8 March 2001, the respondent liquidator again rejected the claim for invoice no 3 of $227,000.00 together with interest of $108,765.90 giving the following further reasons:-

"1. My enquiries reveal that the machine referred to in the invoice is a different machine to the one delivered to ANI.

2. There is not sufficient proof that the machine was ever delivered to ... [MQE], nor that there is any agreement or other obligation for MQE to pay [MQEI] for the machine.

3. I note that there are no records available to myself and that you have not been able to supply any records to evidence delivery or otherwise.

4. My enquiries of the Director have resulted in a response that no documents have been removed, or destroyed. It appears that your client ought to have retained appropriate copies of the records at its own offices. In the absence of any documentary evidence, the claim cannot be accepted.

[38] In his affidavit sworn on 4 May 2001, Gary Robson says of the alleged debt:-

"(a) This was for a mobile/portable primary crushing plant fitted with a 42 x 25 Kue Ken Jaw Crusher. I arranged for delivery of this piece of equipment to [MQE]. I do not have a copy of the delivery docket evidencing this delivery because these records were held in files left by me in the office of [MQE]. I have no knowledge as to the whereabouts of those files and I can only assume that the Respondent now has control of them.

(b) The plant was delivered to ANI's workshop at Ipswich and it was sold to a gold mine in New South Wales. The equipment delivered to ANI comprised two pieces. The primary item was the equipment the subject of Invoice 3. The secondary item was the equipment the subject of Invoice 18 (a copy of which is Attachment 3 to the Response ("the Response") to letter from Clout & Associates to MQEI dated 23 October 2000 - exhibit "DFJ4" to Mr Jardine's Affidavit).

(c) I have discussed this matter with Mr Graham Thompson of Thompson Plant International. Mr Thompson informed me that his company put the deal together to buy both sections of plant for Temora Gold Mine. The person from Temora Gold Mine involved in the transaction was a Mr Chris Seals. Mr Thompson advised that both sections of the plant were delivered from [MQE's] yard at Wacol to ANI at Ipswich.

(d) A Mr Paul Stacey has prepared a diary note of a discussion he has had with a Mr Peter Mayo who worked for ANI (Karribin, Ipswich) at the time of delivery of the plant from 47 Tile Street, Wacol to ANI's workshops. Mr Mayo advised that the plant was used to crush reject stone for heap leaching at Temora Gold Mine, Temora, New South Wales. The plant was owned by a Western Australian company, and they had also purchased a third crusher to add

to the circuit. Mr Stacey's handwritten note confirming his discussion is Attachment 4 to the Response.

(e) Invoice No. 3 was issued back on 18 March 1994. The words "Arranged Debtor" have been written on the invoice. That is not my handwriting and I believe it to be the handwriting of Mr Adrian Humphrey, who was an employee of [MQE] at the time. It was common for MQEI to agree to extend the time for payment of invoices and this invoice is one such example. The wording should have read, "Arranged Creditor". Furthermore, reference to the amount of $227,000.00 is contained in [MQE's] list of Outstanding Creditors as at 30 June 1995. Exhibit "GFR4" is a copy of a list of the outstanding creditors. It was only after the Proof of Debt was lodged that Invoice No. 3 was challenged."

"GFR4" is a list of outstanding creditors of MQE showing a "Sales Purchase" item owing to MQEI for $227,000.00. Ms Mulcahy said she typed this list on Gary Robson's express instructions.

[39] It should be noted that no evidence was called on behalf of the plaintiff at the hearing of this matter from anyone from ANI or any of the persons specifically mentioned, ie. Graham Thompson, Chris Seals, Paul Stacey, Peter Mayo or Adrian Humphrey. No explanation is given for the failure to call any of these witnesses.

[40] Bill Robson swore in his affidavit of 17 May 2001:-

"To the best of my recollection, this is an invoice in respect of a crushing plant in fact built by MQE. MQE commenced building it in about November 1993 - prior to the incorporation of MQEI in about February 1994 (according to the affidavit of Mr Gary Robson). To the best of my recollection, no items were purchased by MQE from MQEI in respect of that plant. There is no reason for this invoice to be issued to the best of my knowledge and recollection."

In oral evidence, Bill Robson said he had not seen this invoice prior to the dispute between his brother and himself. However he said he was unable at this stage to distinguish between various crushing plants.

[41] Ms Mulcahy said that the plant was an item of equipment built by MQE which MQE commenced building in November 1993 prior to the incorporation of MQEI. To the best of her recollection, no items were purchased by MQE from MQEI for the plant or its construction. The plant was sold by MQE to Thompson Plant for

$200,000.00. She produced documentation in support of this contention.

[42] In his affidavit sworn on 29 May 2001, Gary Robson gave a rather different story in response:-

"16. Charles [Bill] Robson is referring to a different plant to that which I am referring to in Invoice No. 3. The plant I am referring to is fitted with 42 x 25 jaw crusher and it was built in about 1989/1990 by, I believe, MWA Brisbane Pty Ltd. After it was built, it was exported. I arranged for the

plant to be sent to [MQE] at 47 Tile Street and arranged with Charles [Bill] Robson for the plant to be sold to [MQE] for $727,000.00 Exhibit "GFR1" is a copy of the MQEI Stock List. This item is listed under Number CP1032. That number is the [MQE] catalogue listing number. This crusher was also listed in [MQE's] catalogue as number CP

17. The plant Charles [Bill] Robson is referring to is a 42 x 30 crusher and a 42 x 38 frame. This is a different item altogether. It appears that [MQE] may have sold a second plant to Thompson Plant which is different to that referred to in Invoice 3.

18. I was informed by Charles [Bill] Robson that he had sold the plant fitted with the 42 x 25 jaw crusher to Thompson Plant. It may be that he sold the plant to another party or that he sold a second plant to Thompson Plant."

"GFR1" is an MQEI Stock List which contains a 42" crushing plant with secondary plant and screening section for $727,000.00.

[43] Gary Robson states with regard to Ms Mulcahy's affidavit that he is speaking about a different plant from the one she described:

"29. As deposed to in paragraph 20 [sic] of this Affidavit, the plant in respect to Invoice 3 was for a 42 x 25 jaw crusher. Invoice 1546 exhibited to Ms Mulcahy's Affidavit

("LJM2") is for a 42 x 36 chassis fitted with a 42 x 30 crusher. It is a totally different plant and I can only assume that [MQE] has sold two different plants to Thompson Plant or that it sold the plant the subject of Invoice No. 3 to a different party.

30. I did not speak to any representative of Thompson Plant. It was Charles [Bill] Robson who arranged the deals and Ms Mulcahy who typed the Invoices.

31. It is not the case that Exhibit "GFR4" to my earlier Affidavit was typed on my instruction. It was normal for Ms Mulcahy to compile a list of debtors and creditors at the end of each financial year. She forwarded these documents to [MQE's] external accountant."

[44] In oral evidence, Gary Robson's story about invoice no 3 was entirely different. He said that the plant was exported to a company called Cubon which had its head office in Hong Kong. The plant itself went to Papua New Guinea on hire and then it was reacquired by MQEI from Cubon in 1994. No witness was called from Cubon. Gary Robson was not able to provide any documents relating to that transaction because he said he did not have them with him. He had not apparently bothered to check if these documents were still in existence. He could not recall any salient details of the transaction such as the purchase price or method of payment. His explanation was most unconvincing.

[45] The onus lies on the applicant to prove that the debt is owed to it. This it has failed to do and so this claim must fail.

35 16 June 1995 Freight costs to ship equipment ex Europe 9,274.48

40 7 August 1995 Freight paid to Wilhelmsen Lines for the transport of 1 only Sola Mill (less Ball Mill Shell) and 1 only Humbolt Mill Sweden to Australia

42 18 August 1995 Freight costs for 1 only Sola Mill Shell delivered Fremantle on behalf of MQE

78 22 January 1997 Freight of 3.250 x 4.5 Morgardshammer

81 23 January 1997 Freight of 24" x 12" Kue Ken Crusher and

41/2' Morgardshammer Crusher from Molde to Hagsund and freight to Australia Inspection and interpreter costs

[47] Gary Robson alleged that there was a consignment agreement between MQEI and

MQE that MQE would pay all freight on the consignment stock. He said of invoice

35:

"This was for the freight of the 41/4 Cone Crusher and on a 30 x 20 and a 36 x 10 Jaw Crusher. MQE was responsible for all freight on consignment stock. The 41/4 and the 36 x 10 went into the Selwyn Plant. The 30 x 20 went to the Cooloola Shire Council."

[48] When he rejected these claims on 14 February 2001, the liquidator gave as his reasons:-

35: "This invoice relates to the freight to ship an item from Europe. This invoice does not specify any particular piece of equipment. It describes the charge "freight costs to ship equipment". Supporting documentation to indicate which piece of equipment has not been supplied. Please provide further documentation to support the claim for freight costs and the nature of the goods supplied from Europe. Please also detail how the exchange rate from pounds to Australian dollars of $0.4497 has been determined."

40: "This invoice is for freight paid to Wilhelmsen Lines for the transport of a Sala Mill and a Humbolt Mill from Sweden to Australia. These items are part of the consignment stock. That is, it has been determined that it is the property of MQEI. Please provide the relevant documentation to show the reason that this amount should be paid for by MQE. A copy of the agreement between MQEI and MQE evidencing the agreement to pay freight etc must be provided."

"[These] invoice[s] [are] for freight of items that are part of the consignment stock. It has been determined that it is the property of MQEI. Please provide the relevant documentation to show the reason that this amount should be paid for by MQE."

85: "This invoice is for freight of items that are part of the consignment stock. It has been determined that it is the property of MQEI. There is therefore no evidence of any agreement or reason why MQE is liable for the [charges] relating to MQEI's property."

[49] With regard to invoice 35, the applicant responded:

"1. In our response to your letter dated 23 October 2000, we specified the equipment the subject of this invoice. The brand of the jaw crushers was Kue Ken and the cone crusher was a Symons.

2. In relation to the exchange rate, our client believes that it would have obtained this information from the Bank.

3. Again, when this invoice was issued back in June 1997, the Director of MQE raised no complaint about it whatsoever, and it was only when our client lodged its Proof of Debt that issue was taken with this Invoice. Further, our client does not have the supporting documentation because again, that documentation was in the files removed from MQE's office by the Director or persons associated with him."

[50] In response to the first rejection of invoices 40, 42, 78, 81 and 85, the applicant relied on an oral agreement and previous dealings as follows:

"As set out in our response to the letter from Clout & Associates dated 23 October 2000, a verbal agreement was entered into between MQE and ... [MQEI] that if MQEI sent stock to MQE, then MQE was responsible for both freight and repairs to the stock. MQE only took issue with this when MQEI's Proof of Debt was received. Furthermore, there are a number of examples whereby MQE paid for freight, namely:

(a) 1 x Svedala 48" x 40 jaw crusher.

(b) 1 x Nyhammer 2.1 x 3.6m ballmill.

(c) 2 off 1.3 x 2.4m ballmills.

(d) Various 51/2 Symons cone crusher parts.

(e) 1000 KVA transformer.

(f) Gear box and motor for 3.6m x 4.5m mill.

This is clear evidence that MQE agreed to pay for the freight."

[51] The liquidator in response to the applicant's solicitors relied on the following further matters to reject the claim:

"1. There is no evidence in writing of any agreement that MQE

2. The Director's version of the course of business, and your client's differ. In the absence of any further evidence the position is at best equivocal for your client, and on that basis, I cannot admit the proof.

3. The fact that MQE may have paid freight on some occasions seems to be an example of specific occasions rather than any generalised agreement. I do not consider that to be evidence of such an agreement.

4. In view of the contradictory state of the evidence, the nature of the claim and the absence of any documentation whatsoever, I reject the claim.

5. The property in question was the property of MQEI."

[52] With regard to invoice 35, the liquidator said:

"1. There is no evidence that the equipment was ever delivered to MQEI.

2. I note your client is unable to supply any supporting documentation. In respect of the records available to myself, those matters are set out above in relation to invoice No. 3.

3. In view of the various disputes, the absence of any sworn statements or other documents, I am unable to admit this matter of proof."

[53] Gary Robson then repeated his assertions with regard to invoice 35 and provided correspondence relating to other occasions on which freight was paid. These documents show that MQE arranged for the importation and paid the freight on particular items sold by MQEI to MQE but does not assist in showing that MQE owed moneys to MQEI for freight paid on other items of equipment. Bill Robson says in his affidavit dated 17 May 2001, that there was "simply no arrangement or agreement ever struck between MQEI and MQE that MQE was to be responsible for the freight of any and all equipment imported into Australia by MQEI." He said that on occasions that equipment would remain in Customs Bond for years until MQEI found a purchaser. He said that in a period of ten years, MQE only sold equipment for or on behalf of MQEI, or purchased equipment from MQEI less than half a dozen times.

[54] In his affidavit sworn 29 May 2001, Gary Robson says in response:

"19. I reject the assertion that there was no arrangement or agreement for [MQE] to pay for the freight. It was not up to MQEI to find a buyer in Australia. It would make no sense for MQEI to ship equipment from one side of the world to the other and then have to find a buyer. MQEI has sold numerous items of equipment from the location where it was being held overseas. The fact that the equipment was

being sold on a consignment basis means that it was consigned to [MQE] for it to sell.

20. I signed the packing bills because MQEI was in fact the sender of the goods. I recall speaking with the shipping companies to arrange the freight rates, but the order numbers to do the shipments were issued by [MQE] in accordance with the arrangement."

[55] I do not accept Gary Robson's assertion made in paragraph 11(b) of his affidavit sworn on 4 May 2001 that there was an agreement that MQE would pay freight on all equipment delivered to it by MQEI on a consignment basis. Each item therefore had to be considered on an individual basis.

[56] Gary Robson was unable to produce any documentary evidence at the hearing to show that MQEI had in fact incurred the expenses for which he said MQE was liable to MQEI nor any written evidence of any agreement by MQE to be liable for these freight expenses if they were incurred by MQEI. He was unable to say to whom MQEI made the payments or which shipping companies were used.

[57] In his affidavit sworn 4 May 2001, Gary Robson said:

"In relation to Invoice 35, the equipment the subject of this Invoice was a 41/4 Cone Crusher and a 30 x 20 and a 36 x 10 Jaw Crusher. This equipment was delivered to [MQE] and has been on-sold. The

41/4 Cone Crusher and the 36 x 10 Jaw Crusher went into the Selwyn Plant. The 30 x 20 Jaw Crusher was sold to the Cooloola Shire Council. The brand of the Jaw Crushers was Kue Ken and the Cone Crusher was a Symons. When this Invoice was issued on 16 June

1995 no complaint was raised about it and it was only when the Proof of Debt was lodged that issue was taken. This item is in the list of Mine & Quarry Equipment Outstanding Creditors (Exhibit

"GFR4"). It is recorded as "Freight" for $9,274.78."

[58] Exhibit GFR4 is a list of outstanding creditors of MQE as at 30 June 1995. It contains an undated item of freight owing to MQEI in the amount of $9,274.78.

[59] In his affidavit dated 17 May 2001, Ms Mulcahy said that MQE has no records in relation to this equipment. There was no purchase order from MQE. She said that the equipment must have belonged to MQEI.

[60] The claim has not been sufficiently proved and should not be allowed.

[61] In his affidavit sworn 4 May 2001, Gary Robson said with regard to these invoices:

"In relation to Invoices 40 and 42, the Sala Mill referred to in Invoice 40 and the Sala Mill Shell referred to in Invoice 42 form part of the same piece of equipment. [MQE] elected to have the Shell delivered to Perth, as Charles [Bill] Robson felt it would be sold in Western Australia. [MQE] elected to bring all of the other parts of the Mill to Brisbane because of security concerns over all of the

smaller parts, and for those parts to be held in the bond store. The equipment in Invoice 40 was shipped by Wilhelmsen Lines and the equipment in Invoice 42 was shipped by Seabridge. MQEI advanced money to [MQE] for payment of freight and has not been reimbursed. I do not have a list of [MQE's] Outstanding Creditors for this period."

[62] Ms Mulcahy recalls making out invoices 40 and 42 on instruction from Gary Robson. Bill Robson did not know anything about the items of equipment until they had arrived in Western Australia.

[63] Once again, MQEI has failed to prove that MQE is liable for the freight on this equipment which belonged to MQEI.

[64] In his affidavit sworn 4 May 2001, Gary Robson said:

"In relation to Invoice 78, Linda Mulcahy who is Charles [Bill] Robson's Secretary, prepared the Purchase Orders which included the costs of freight the subject of this Invoice. Exhibit "GFR6" is a copy of a facsimile transmission from Adrian Humphrey of [MQE] to myself referring to these Purchase Orders. I made a notation on the bottom of that facsimile transmission, the effect of which was that it was [MQE's] responsibility to pay for these Purchase Orders. Monies were advanced by MQEI to [MQE] for the payment of this freight and [MQE] was to reimburse MQEI for this amount. Again, I do not have a list of [MQE's] Outstanding Creditors for this period."

[65] Ms Mulcahy says that the freight referred to in invoice 78 was in fact paid directly by MQE on 5 October and 16 October 1998 by telegraphic transfer and cheque. She gives details of the payment. There is no record of MQEI advancing money to MQE for those payments.

[66] In paragraph 34 of his affidavit in response sworn 27 May 2001, Gary Robson said:

"I now realise that I was mistaken when I said in my earlier Affidavit that the Purchase Orders marked "GFR6" related to Invoice No. 78. This facsimile transmission demonstrates that on occasions when [MQE] had sufficient funds, it paid for the freight. The fact of the matter is though, that Invoice No. 78 remains outstanding. The difficulty I have in this matter is that I have very few records available to me and I am working for the most part from memory."

There is no evidence sufficient to prove to the court that MQE owes the debt said to be the subject of this invoice to MQEI.

[67] In his affidavit sworn 4 May 2001, Gary Robson said:

"In relation to Invoice 81, this equipment was shipped on the same shipping line as the equipment referred to in Invoice 78. Again,

[MQE] is obliged to reimburse MQEI for the monies it advanced for

the payment of these costs. I do not have a copy of [MQE's] list of

Outstanding Creditors for this period." For similar reasons, this claim should be rejected.

[68] In his affidavit sworn 4 May 2001, Gary Robson said:

"In relation to Invoice 85, the sum of $30,000.00 represents the balance amount owing for freight. MQEI paid the freight costs direct to the shipper, Cargo General Marine. The equipment that was shipped to [MQE] came from France. Again, I do not have

[MQE's] list of Outstanding Creditors for this period."

[69] With regard to invoice 85, Ms Mulcahy says that MQE only ever received one shipment of crushers from France. Originally, MQE had paid the freight charges on the 5 crushers. So on 14 December 1994, MQE invoiced MQEI for this freight. She exhibited a copy of this invoice to the affidavit sworn 17 May 2001. It is invoice no 1551 for $61,044.35. MQE records show that the amount owing on the invoice was paid by telegraphic transfer. There would not appear, as she deposes, to be any reason why MQE should repay MQEI $30,000.00 of that amount.

[70] In his affidavit in response sworn 27 May 2001, Gary Robson said:

"35. The crushers the subject of this invoice were shipped to

[MQE]. It did not have sufficient funds to pay the freight as well as other accounts, so I had [MQE] send an invoice to MQEI for the freight and MQEI forwarded the funds for payment. The amount was on-paid to K Henley & Co. and then to Cargo General Marine. It was common for invoices to be raised so that payments made were referable to an invoice, but it remained the responsibility of [MQE] to repay this amount to MQEI.

36. On behalf of [MQE], I sold two of the 51/2 foot crushers to ANI for approximately $805,000.00. These two crushers and ancillary equipment made up approximately one half of the consignment. When [MQE] paid for the two crushers, they also paid approximately one half of the freight costs, leaving a balance of $30,000.00 owing. Accordingly, MQEI paid this freight on behalf of [MQE] and the balance of $30,000.00 is due and payable."

This explanation contradicts the evidence of Linda Mulcahy. Particularly given the absence of evidence from ANI to support Gary Robson's version, I prefer Ms Mulcahy's evidence and therefore cannot allow this claim.

"Costs incurred to inspect 60" x 48" Jaw Crusher $15,400.00

& 36" Allis Gyratory Crusher in Norway.

For Invoices issued to Davy Kinhill Fluor Daniel

Joint Venture on behalf of MQEI.

200M 2C&E Cable including glands & Ties to hook

up Water System. $980.00

Loading & Packing of Primary Crushing Plant & spares

For shipping including - crane hire & timber for

dunnage. $6,183.96

On site Electrician (Trevor Hills) 359 hours @

$45.00 per hour $16,155.00

On site Fitter (Tony Carter) 715.50 hours @

$50.00 per hour

715.51 $35,775.00

SUB TOTAL $74,493.96

LESS deductions held by Lihir

· Hydraulic hoses $450.00

· Tail drum guards $2,000.00

· Air freight $ 690.00 $3,140.24

Less accounts held pending

T. Carter's report.

· Screen Foundations $2,500.00

· 20% T. Carters time $7,155.00 $9,655.00

Of this amount, $28,868.40 was paid by telegraphic transfer on 18 April 1997, leaving $32,830.32 outstanding. There was a further part payment on 26 October

1997 of $7,834.42, leaving $24,995.90 outstanding.

[72] Gary Robson asserted that the inspection referred to was carried out in 1997 with the knowledge and consent of Bill Robson. He said that he could not understand why this invoice, which was part paid, was now being disputed.

[73] In rejecting this claim on 14 February 2001, the respondent said:

"$15,400 relates to costs incurred to inspect a jaw crusher and an Allis Gyratory crusher in Norway. There is no evidence available to the Liquidator that the Company ever requested the inspection to

[sic] the jaw crusher. The Company has not received a report that details the inspection of the pieces of the equipment."

[74] In his response, Gary Robson did not provide any further evidence. He merely repeated his earlier assertions. In an affidavit sworn on 4 May 2001, he said that it was common for him to inspect equipment in different countries for the purpose of purchasing that equipment and forwarding it to MQE for re-sale. He provided copies of four invoices where MQE paid Gary Robson's expenses to inspect equipment. All of these invoices relate to inspections apparently carried out in

1994 all of which were paid on 27 February 1997. Gary Robson also deposed:

"It was always a joint decision between Charles [Bill] Robson and myself to inspect equipment at different locations. Further, I would also travel to locations not only to purchase equipment, but to take listings like a real estate agent of equipment for the [MQE] catalogue. I would in most cases photograph this equipment. There were a significant number of international listings in the [MQE] catalogue, and most of the equipment listed is that which I inspected. Accordingly, this inspection was undertaken with the authority and approval of [MQE]."

[75] Bill Robson denied any joint decision of this type. He said Gary Robson, who lived out of Australia more than six months out of any year, took it upon himself to inspect and purchase equipment overseas for MQEI not MQE. A number of times Gary Robson requested that these items be advertised in brochures and other advertising material circulated by MQE in Australia, but that no cost was ever levied to MQEI for that service.

[76] Ms Mucahy's evidence as to this partly paid invoice is instructive as to the misleading, if not dishonest, way in which she was instructed to draw up documents by Gary Robson. She says that Gary Robson would frequently direct her to prepare invoices. He instructed her to show what were in fact his drawings as "interest on loans" or "reimbursement of expenses". Apart from the inspection, she says the balance of the outstanding invoice relates to work done on the crusher plant sold to the Lihir Mine by MQEI which retained the profits of the sale. Part of the invoice was paid only because Gary Robson directed it to be paid.

[77] In his affidavit sworn 29 May 2001, Gary Robson says in response:

"21. An example of equipment being inspected for listing in the

[MQE] catalogue is two transformers located via an MQEI contact in Belgium, a Mr Bruno and Mr Charles Focquet. Charles [Bill] Robson attempted to sell these transformers to a buyer in Australia. During these negotiations, he dealt directly with Mr Focquet. It is correct that MQEI did not ship all items purchased to Australia because Mr Charles

[Bill] Robson did not believe they were saleable here or alternatively, [MQE] could not afford the freight. MQEI was reluctant to have the debt owing to it increase, and accordingly, MQEI either sold those items elsewhere or is still holding them overseas.

21. As a normal practice, when I located equipment, I would do a listing card showing details so that [MQE] could advertise the equipment. I spent less than six months of the year in Australia, and in some years as little as approximately four

months. The enquiries raised as a result of the advertising would go direct to Charles [Bill] Robson to deal with. It was only on some occasions that he passed these enquiries on to me and I would then have an opportunity to deal direct with the client.

37. I do not have the Lihir Plant file as that would be with Charles [Bill] Robson. Additional on-site work was done. It is apparent that [MQE] has raised further invoices to Davey Kinhill Fluor on behalf of MQEI, for which it has been paid and it has only part paid MQEI."

[78] Gary Robson was unable, in his oral evidence, to give any further details of the inspection trip and whether he inspected any other equipment or how the costs of

$15,400.00 was made up. It seems merely to be an example of where Gary Robson now says that MQE should bear expenses while MQEI made any resulting profit. In the absence of any agreement to that effect, the claim should not be allowed.

96 20 October 1997 1' 8" Jaques Gryso Crusher complete with motor, water tank and pump

150 30 June 1999 1 only Telsmith Apron Feeder & Hopper 23,000.00

[80] No material other than the invoices was received by the liquidator in support of these alleged debts. When rejecting them on 14 February 2001, the liquidator said with regard to each invoice:

"I am advised by the Director that Mr Gary Robson acquired this item prior to the formation of MQEI as a company. The item was held at MQE's premises since that time. Please provide a copy of the invoice indicating the transfer of the equipment from Mr Gary Robson to MQEI. Alternatively, please provide written instructions that MQE should hold the item for MQEI instead of Mr Gary Robson."

[81] In response, Gary Robson merely asserted that there was no documentation in existence to record the transfer of ownership of the equipment.

[82] The liquidator again rejected the claim on 8 March 2001, stating:

"1. My enquiries reveal that these items of equipment appear to have been owned by Mr Gary Robson personally.

2. I note that there is simply no evidence to record a transfer of ownership of the equipment from Mr Gary Robson to MQEI.

3. No evidence of such an agreement has been put forward, and no document exists. If such a document existed, it may have to comply with the Stamps Act, and no such document

complying with that Act has, or according to your advices is able to be, produced.

4. Accordingly, the claim by MQEI is rejected. Should a claim by Mr Gary Robson be lodged in his personal capacity, that claim will be separately considered."

[83] Gary Robson responded by affidavit sworn on 4 May 2001, that he had owned the equipment but had transferred it to MQEI. That transfer was not supported by any documentation. He said that the equipment was in MQE's care for it to on-sell. He also said that MQE had sold the equipment but had not paid MQEI for it.

[84] Bill Robson said these items, which were kept at Tile Street, Wacol, for more than ten years, in fact belonged to Gary Robson and had not to his knowledge ever been transferred or assigned to MQEI.

[85] In his affidavit in response sworn 29 May 2001, Gary Robson said:

"The equipment the subject of these invoices is not located on the land at Tile Street, rather it was sold some time ago. The invoices remain outstanding. On Invoice No. 96 the words "Sold Arranged Debtor" are written. This is not my handwriting."

[86] It appears that the equipment was sold about four years ago. There is no explanation as to why the one invoice was raised on 20 October 1997 and the other not until 30 June 1999. At the hearing of this matter, Gary Robson was unable to produce any evidence to support his claim. He conceded that if the equipment had been transferred from his name to MQEI, it should appear on MQEI's stock list but was unable to provide any such stock list. As there is no evidence sufficient to prove that this equipment was owned by MQEI, this claim should not be allowed.

189 5 April 2000 Payment of Consultancy Fees to Henry Linsi for the month of December 1999 on behalf of MQE

It was asserted by the applicant that Mr Linsi acted as a consultant to MQE and his fees had been part paid by MQE. Gary Robson asserted that the services referred to in this invoice were rendered by Mr Linsi for and on behalf of MQE. MQEI paid the balance fees to Mr Linsi, he said, for and on behalf of MQE.

[88] In his rejection of this claim on 14 February 2001, the liquidator said:

"This amount is for one (1) month's payment to Mr Henry Linsi. Mr Linsi performed no work for MQE. The Director of the Company did not provide any direction to Mr Linsi. Mr Linsi worked for MQEI solely at the direction of Mr Gary Robson. MQEI has retained possession of the property resulting from that work

(computer disks containing engineering design)."

[89] This was rejected by Gary Robson on 26 February 2001. In support of his claim, Gary Robson provided Mr Linsi's business card which he said shows the name

"Mine & Quarry Equipment"; and statements from Mr Linsi which Gary Robson said confirmed that he was engaged by MQE and that MQEI paid the balance fees owing on the invoice for and on behalf of MQE. Attached to Gary Robson's affidavit is a facsimile or photocopied copy of the business card. It has been poorly copied and part is obliterated by dark shading, but the words "Mine & Quarry Equipment" as well as MQE's Australian address are visible. Also attached was a facsimile copy of a telefax sheet dated 18 February 2001 said to be from and signed by Henry Linsi to Gary Robson at Mine & Quarry International, Germany" saying:

"It is herewith confirmed that Mr Henry Linsi working as free lance Consulting Engineer for the company [MQE] during 1999 in Brisbane, Australia has received his main instruction from Mr. Gary Robson and during his absents [sic] or for special projects by Mr. Bill Robson including coordination with the draughtsman to attend to the tasks as requested."

[90] Gary Robson also attached a copy of another facsimile said to be dated 16 February

2001, but sent an hour later than the facsimile dated 18 February 2001. It refers, somewhat mysteriously, to "invoice - payment 199" although the invoice in question is 189. Further uncertainty is introduced into what to make of this facsimile by the fact that it starts at paragraph 2. That paragraph says:

"2. After a check-up of receipt of payment herewith the following for payments for services rendered in December:

3 January, 2000: receipt of Transfer from Germany DM

7 January, 2000: Cash payment in S.A. ex Gary ANZ card

8 January, 2000: Cash payment in S.A. ex Gary ANZ card

22 January, 2000: ANZ overseas remittance into HL Brisbane account (Ex M$Q International account) $1713.-

I hope above will assist to clarify with the receiver that all payment where [sic] made by Mine & Quarry International to Lima-Consult

(Pty) Ltd, H.H. Linsi for the December 1999-Account."

[91] Unsurprisingly, this facsimile did not achieve its avowed purpose of eludicating this claim against MQE for its liquidator.

[92] A hardly legible copy of a facsimile of a handwritten note from Linda Mulcahy to Gary Robson which seems to suggest that MQE apparently paid $1,500 to "Henry" and that the balance of "$2,526.30 may have been paid by MQEI, does not really assist in the determination of the question whether MQE owes this money to MQEI. For it to do so, the liability would have had to have been a debt owing by MQE to Mr Linsi.

[93] A photocopy of a facsimile of a note from Gary Robson on behalf of MQEI to Ms

"FIRST THING BANK $1500.00 OF CLEAR FUNDS TO MY

CHEQUE A/C - SHE [sic] IT AS PART PAYMENT OF HENRYS

[sic] DECEMBER A/C - I NEED TO DRAW MONEY OVER HERE BY FRIDAY TO PAY HIS HOUSE PAYMENT - ask my bank how or what do I do to draw it on my access card here in J/Burg ($1500.00) in one amount my a/c no is 560254 9551 49948. PLEASE DO IT FIRST THING & CLEAR FUNDS - We don't

want to have to wait to clear a cheque."

[94] Bill Robson says that Mr Linsi did not work for MQE. He attached to his affidavit sworn 17 May 2001, a better copy of Mr Linsi's business card. It shows that the part obliterated by dark shading in the copy exhibited by Gary Robson is the word

"MINQUEP" in large, bold type. It is the most prominent entry on the business card. That name is not owned by Bill Robson. He does not know who owns it but he did receive some mail addressed to Tile Street, Wacol to:

"Gary Robson - Managing Director

MINQUEP."

[95] The ASIC database has two entries using the name "MINQUEP", MINQUEP Holdings Aust Pty Ltd and MINQUEP Stayrite Engineering Pty Ltd. Of the former, the only director is Carl Stacey. Of the latter, the directors are Gary Robson and Paul Stacey (who is Carl Stacey's father). Gary Robson said that MINQUEP was registered as a trademark by MQEI.

[96] Bill Robson attached to his affidavit a letter he had received from Mr Linsi dated

13 May 2001. Mr Linsi said he met Gary Robson in 1985 when he visited South Africa to evaluate a large impact crusher for a project in Australia. Their acquaintance was renewed in 1999 when Gary Robson asked Mr Linsi to work on a number of projects. All his instructions came from Gary Robson. Very occasionally he received administrative support from Bill Robson. Mr Linsi was unaware of the difference between the companies.

[97] Ms Mulcahy said that Gary Robson arranged for Mr Linsi to be present at the premises occupied in Wacol by MQE and MQEI. Gary Robson drafted letters from MQEI for Ms Mulcahy to type with regard to Mr Linsi's work. She exhibited two letters to Boral Recycling from MQEI as examples.

[98] Gary Robson said in oral evidence that he engaged Mr Linsi for MQE. He said he did that with the agreement of his brother. However, I do not accept his evidence that there was any such agreement. He said that MQEI had paid some money owing to Mr Linsi by MQE but was unable to provide any evidence of those payments having been made. His evidence, which included statements such as

"there will be a transfer slip somewhere in Germany", was unsatisfactory and at the least insufficient to prove this claim. I do not accept that MQE is contractually bound to pay on this invoice to MQEI.

Conclusion

[99] The applicant has not satisfied the onus of showing that it is owed any of the debts purportedly shown by the invoices the subject of this decision. Accordingly the appeal against the liquidator's rejection of the proof of debt must fail and the application to this court dismissed.