CORPORATIONS - liquidator - application for warrant to issue under s 530C of the Corporations Act 2001(Cth) - warrant to search for and seize property
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CORPORATIONS - liquidator - application for warrant to issue under s 530C of the Corporations Act 2001(Cth) - warrant to search for and seize property
Judgment (11 paragraphs)
[1]
The District Registrar issue, pursuant to s 530C of the Corporations Act 2001 (Cth) a warrant substantially in the form of the warrant appearing at Annexure A.
The requirement that the interlocutory process be served on the respondent is dispensed with in the first instance and leave is granted to the applicant to make the application ex parte.
Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) and in lieu of the orders made 10 November 2021, on the grounds that it is necessary to prevent prejudice to the proper administration of justice pursuant to s 37AG(1)(a) of the Federal Court Act and until further order of the Court or the discharge of this order pursuant to orders 4 and 5 below, publication or other disclosure of the following is prohibited as follows:
(a) the interlocutory process for the issue of a warrant and other relief dated 8 November 2021 is to be kept confidential and, except with the leave of the Court, is not to be disclosed to anyone other than the Court and Court staff;
(b) the affidavits of Jerome Hall Mohen dated 8 November 2021 and Philip Davie dated 8 November 2021 (both affidavits filed in support of the interlocutory process for the issue of a warrant) are to be kept confidential and, except with leave of the Court, are not open to inspection to any person other than the Court and Court staff; and
(c) the outline of submissions dated 12 November 2021, the list of authorities and these orders are to be kept confidential and, except with the leave of the Court, are not to be disclosed to anyone other than the Court and Court staff.
Within 14 days of the last date on which the warrant has been executed, the applicant file an affidavit reporting on the execution of the warrant and annexing a list of the property and books seized.
On the filing of the affidavit referred to in order 4, order 3 shall be discharged.
Within seven days of the filing of the affidavit referred to in order 4, the applicant serve on the respondent the interlocutory process, the affidavits referred to in order 3(b), a copy of any orders made in these proceedings, the reasons for judgment and the affidavit referred to in order 4.
In lieu of personal service, the documents referred to in order 6 may be served by emailing a copy of the documents to romeo@mapexports.com, and by delivering copies to the property at 60 Prinsep Road, Jandakot WA 6164 marked for the attention of Mr Rebelo.
Pursuant to s 597A of the Corporations Act, within 14 days of service of the documents referred to in order 6, the respondent file an affidavit specifying:
(a) the current whereabouts of the vehicles, and any keys for those vehicles, listed in Annexure B that have not been seized by the applicant (the Outstanding Vehicles), including the specific address where the Outstanding Vehicles are located;
(b) if the current whereabouts of the Outstanding Vehicles, and any keys for the Outstanding Vehicles, are unknown, the address of the last known location of the Outstanding Vehicles and those keys; and
(c) to the extent that the respondent is aware of any person who may have possession, control or custody of any of the Outstanding Vehicles, the name and contact details of those persons.
Liberty to apply to relist the proceedings on two business days notice.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A
WARRANT FOR SEARCH AND SEIZURE
TO: JEROME HALL MOHEN AS LIQUIDATOR OF MAP EXPORTS PTY LIMITED (IN LIQUIDATION) (ACN 153 932 202) of RSM Australia Pty Ltd, Level 32, Exchange Tower, 2 The Esplanade Perth WA 6000
WHEREAS on application by JEROME HALL MOHEN, the Liquidator of MAP Exports Pty Limited (In Liquidation) (ACN 153 932 202) (the Company), the Court is satisfied that ROMEO REBELO of 60 Prinsep Road, Jandakot WA 6164 has:
concealed or removed property of the Company with the result that the taking of the property into the custody or control of the Liquidator has been and will be prevented or delayed; and
concealed, destroyed or removed books of the Company or is about to do so.
YOU ARE HEREBY AUTHORISED, with such assistance as is reasonably necessary from members of the Western Australia Police Force and from any other persons, to search for and seize all property listed in the Schedule to this warrant, together with the books of the Company that come within the definition of 'books' in s 9 of the Corporations Act 2001 (Cth), and which is in the possession, custody or control of the respondent ROMEO REBELO and to hold possession of such property and books of the Company seized under this warrant until otherwise directed by order of this Court.
AND YOU ARE AUTHORISED in order to seize such property of the Company under this warrant to break open a building, room or receptacle, including at:
60 Prinsep Road, Jandakot WA 6164;
239 Goss Road, Uduc WA 6220; and
442 Goss Road, Uduc WA 6220;
where the property is or books are or where you reasonably believe the property to be located.
DATED: 15 November 2021
SCHEDULE - PROPERTY OF THE COMPANY
Vehicles
Grey B.M.W. 5 Series sedan with licence plate '1GAZ929'
Grey Mercedes Benz GLS Class station sedan with licence plate 'MAPXPORTS'
White Nissan Patrol with licence plate 'H1134'
Orange Holden Commodore with licence plate '1GSS913'
Black Holden Maloo with licence plate '1 HBP880'
Yellow custom box top trailer with licence plate 'H12618'
Grey box top trailer with licence plate '1TUE231'
Property as otherwise listed in the Company's depreciation schedule for the year ended 30 June 2020
South City Honda quad bike
Brother Laser Printer
Computer system Intel i7 6700 CPU 500GB Samsung SSD Drive
Cupboard and bookcase
Desk
Ipad 64gb DLXNJ7k9G5vw
Mobile phone
MS Office Windows Tablet Surface Pro 3
Office chair - Archer
Office chair - Black
Office chair - Yorkshire Executive
Officehet Printer
Shuttle computer system
SURFACE PRO BOOK 2/17
Woodwinds PRA software
Brush polisher
Coolroom
Electronic eye packing machine
Grading machine
Komatsu forklift
Tractor
Annexure B
(for purpose of affidavit under paragraph 8 of orders)
Grey B.M.W. 5 Series sedan with licence plate '1GAZ929'
Grey Mercedes Benz GLS Class station sedan with licence plate 'MAPXPORTS'
White Nissan Patrol with licence plate 'H1134'
Orange Holden Commodore with licence plate '1GSS913'
Black Holden Maloo with licence plate '1 HBP880'
Yellow custom box top trailer with licence plate 'H12618'
Grey box top trailer with licence plate '1TUE231'
[2]
Introduction
1 By orders of the Supreme Court of Western Australia made 13 September 2021, MAP Exports Pty Ltd (MAP) was wound up in insolvency, and Jerome Mohen of RSM Australia Partners was appointed its liquidator.
2 By an interlocutory process filed 9 November 2021, the liquidator seeks an order pursuant to s 530C of the Corporations Act 2001 (Cth) that the Court issue a warrant authorising him to search and seize known property and all books of the company, including certain motor vehicles, and which is in the possession, custody or control of Romeo Rebelo, including at three identified properties in Jandakot and Uduc in Western Australia.
3 Mr Rebelo has at all material times been MAP's sole director and shareholder.
4 On 14 September 2021 the liquidator wrote to Mr Rebelo formally requiring him to complete the 'report on company's affairs and property' required by s 475(4) of the Corporations Act (ROCAP), deliver up all company property and books and inform him of the location of other company books and records. The liquidator also issued a formal a notice under s 530A(2) of the Corporations Act requiring that Mr Rebelo provide information about MAP's property and affairs, and notifying him that under s 530A(2), he was required to attend on the liquidator and give such information that is reasonably required.
5 Since that time Mr Rebelo has not provided a ROCAP and has not delivered up any property, despite further requests, including on each of 4, 5 and 6 October 2021.
[3]
Section 530C - principles
6 Section 530C of the Corporations Act provides as follows:
Warrant to search for, and seize, company's property or books
(1) The Court may issue a warrant under subsection (2) if:
(a) a company is being wound up or a provisional liquidator of a company is acting; and
(b) on application by the liquidator or provisional liquidator, as the case may be, or by ASIC, the Court is satisfied that a person:
(i) has concealed or removed property of the company with the result that the taking of the property into the custody or control of the liquidator or provisional liquidator will be prevented or delayed; or
(ii) has concealed, destroyed or removed books of the company or is about to do so.
(2) The warrant may authorise a specified person, with such help as is reasonably necessary:
(a) to search for and seize property or books of the company in the possession of the person referred to in subsection (1); and
(b) to deliver, as specified in the warrant, property or books seized under it.
(3) In order to seize property or books under the warrant, the specified person may break open a building, room or receptacle where the property is or the books are, or where the person reasonably believes the property or books to be.
(4) A person who has custody of property or a book because of the execution of the warrant must retain it until the Court makes an order for its disposal.
7 I note the requirement of s 530C(2) that the warrant relates to items in the possession of the relevant person. Section 9 of the Corporations Act defines 'possession' by reference to s 86, which explains:
A thing that is in a person's custody or under a person's control is in the person's possession.
8 In Tang (Liquidator) v Wright, in the matter of Wright's Transport Pty Limited (in liq) [2020] FCA 709, Stewart J said:
[14] A court's power to issue a warrant is discretionary, but the discretion is only enlivened if the court is satisfied that the elements of s 530C(1) of the Act have been established: Re Ezyclad Pty Ltd (in liq) [2014] VSC 66; 98 ACSR 38 at [59]. The authorities in this Court have made orders issuing a warrant generally without any conditions attached: see Morton v Robins [1996] FCA 472; 14 ACLC 119, Australian Securities Commission v Samson [1997] FCA 739; 24 ACSR 555 and Vartelas v Kyriakou [2009] FCA 1489. Ultimately, however, the question of whether conditions should be imposed is a matter for the court's discretion: see Re Ezyclad at [67].
9 For convenience, I repeat the summary of the principles that I included in Carrello (Liquidator), in the matter of Drilling Australia Pty Ltd (in liq) [2019] FCA 1563 relating to the exercise of discretion as follows:
[6] Section 530C is ordinarily 'a remedy of last resort': see Cvitanovic v Kenna & Brown Pty Ltd (1995) 18 ACSR 387.
[7] A warrant should be granted if the Court finds that there has been a 'persistent pattern of non-cooperation and evasion': Whitemore Holdings Ltd (in liquidation) [2004] FCA 806 at [9]-[10], affirmed in Beattie v Gray, in the matter of Control Rail Pty Limited (in liq) [2018] FCA 1524. This does not appear to be a requirement of granting a warrant, but provides useful guidance.
[8] Factors that have been relied upon in deciding that a person has concealed or removed the property of the company include:
(a) refusals to comply with liquidators' requests to deliver up the books and records of the company: Vartelas v Kyriakou [2009] FCA 1489 at [6];
(b) transfer of assets to, and continued use of the assets by, related companies or entities without proper accounting: Crisp, in the matter of Buchanan Group Holdings Pty Ltd v Iliopoulos [2011] FCA 1521 at [11]; and
(c) moving of assets, books or records from one place to another: Crisp at [13].
[4]
The evidence
10 The liquidator relies on four affidavits filed in the proceedings. The liquidator has filed two affidavits, as has Philip Davie, a senior manager employed by RSM, who has assisted the liquidator with the day to day conduct of the liquidation. The factual matters set out in these reasons are based on the evidence provided by those affidavits.
11 The evidence raises three matters of substance:
(a) a number of vehicles registered in the name of the company which have not been made available to the liquidator or financiers;
(b) the existence of unproduced books; and
(c) a pattern of a lack of cooperation on Mr Rebelo's part as to disclosing the whereabouts of property and books.
[5]
Vehicles
12 The liquidator obtained from the Department of Transport a list of seven vehicles registered in the name of the MAP. Those vehicles are a grey BMW 5 Series sedan; a grey Mercedes Benz GLS class station sedan; a white Nissan Patrol; an orange Holden Commodore; a black Holden Maloo; a yellow custom box top trailer; and a grey box top trailer.
13 Mr Davie gives evidence of a telephone conversation with MAP's former accountant in which the accountant said words to the effect that all the company vehicles are subject to finance and 'the director' of the company would deal with the finance companies direct.
14 Mr Davie also deposes to a conversation with Mr Rebelo on 24 September 2021 during which he asked where the vehicles were located, and was told they were 'on the farm'. Mr Rebelo told Mr Davie he would not deliver up the vehicles. On 29 September 2021 Mr Davie again spoke to Mr Rebelo, and asked for access to the vehicles. Mr Rebelo declined and said he would not do anything until he met with Mr Davie. Mr Davie also sent an email to Mr Rebelo on that date requiring access to the vehicles. Mr Rebelo failed to attend an appointment with the liquidator that was scheduled for 4 October 2021. Various phone messages left by the liquidator on 4, 5 and 6 October 2021 on Mr Rebelo's phone service were unreturned.
15 Mr Davie assumes the reference to 'the farm' in his communications with Mr Rebelo is a reference to properties in Goss Rd, Uduc, as identified in the application. On the basis of the evidence before me, I accept that to be the case. Title searches indicate the Uduc properties are owned by another company related to MAP and Mr Rebelo, being MAP Exports Farming Pty Ltd. The directors and shareholders of the company are Mr Rebelo and Nada Rebelo. The liquidator understands that Nada Rebelo is Mr Rebelo's wife. Mr Davie has driven past the property and taken a photo of a sign at the Uduc property which states, relevantly, 'All inquiries to Romeo Rebelo'.
16 Mr Davie has been contacted by third parties, including a collection agent on behalf of Mercedes Benz Finance, and a repossession agent retained by BMW Finance, about the potential location of motor vehicles.
17 Importantly, the collection agent informed Mr Davie on 15 October 2021 that he had been trying to recover a Mercedes GLS for some months and believed it was used by Mr Rebelo's wife. He told Mr Davie that he had seen a BMW and Holden Maloo at premises in Jandakot. A title search of those premises indicates it is owned by Mr Rebelo and Nada Rebelo. Mr Davie received another call from the collection agent on the same date, who informed him that Mr Rebelo had told him he had a 'new company called MAP Farming' and has 'some money in there'. The repossession agent on behalf of BMW Finance informed Mr Davie that he had seen a Holden ute and an Amorak ute at the Jandakot property whilst trying to repossess a BMW. A week later Mr Davie drove past the Jandakot property and took photos of three vehicles behind a gate, being an Amorak ute and two Holden utes. The photos show an orange Holden Commodore ute and a black Holden Maloo ute with licence plate numbers that align with the licence plate numbers provided by the Department of Transport.
18 The evidence before the Court also includes extracts from social media posts, apparently made by members of Mr Rebelo's family, that show photos of some of the relevant cars. In particular, photos are shown of an orange Commodore ute on a social media page of a person believed to be Mr Rebelo's son. The books and records of MAP include an accounting record for the purchase of the vehicle, together with a reference to a loan and the son's name. Extracts from the social media pages of another son show photos of a black Maloo ute.
19 Having regard to the evidence, the liquidator believes that the vehicles owned by MAP are generally used by Mr Rebelo and members of his family and are located (while not in use) at either the Jandakot or Uduc properties. None of the vehicles have been delivered up to the liquidator despite request.
20 The liquidator has in his possession a depreciation schedule for the year ended 30 June 2020 that sets out identified property of MAP (including the vehicles). That property has not been delivered up by Mr Rebelo or otherwise.
[6]
Unproduced books of MAP
21 The Liquidator has received books of the Company from various sources, including vehicle finance companies, MAP's former accountant and lawyers, the ANZ Bank, the Australian Taxation Office and Xero accounting records. The former accountant also informed the liquidator that he had provided accounting records to Mr Rebelo. The liquidator deposes to the fact that despite requests, he has received no books and records from Mr Rebelo. In particular, the liquidator has not received documents that are necessary to substantiate the 2020 accounts of MAP, including working papers, supplier invoices and communications.
[7]
Absence of cooperation
22 The liquidator deposes to a lack of cooperation on Mr Rebelo's part. In particular, he has failed to attend the liquidator's office to give information about MAP (as was formally requested by the liquidator pursuant to s 530A); failed to provide the liquidator with the ROCAP; failed to deliver up to the liquidator any of MAP's books or tell the Liquidator where they are located; and has failed to deliver up to the liquidator any of MAP's property.
[8]
Consideration - warrant
23 I have taken into account the serious nature of an application for the issue of a warrant. However, I am satisfied that the elements of s 530C(1) of the Corporations Act have been established.
24 I am satisfied that there has been a clear and persistent pattern of non-cooperation and evasion with respect to informing the liquidator as to the whereabouts of MAP's vehicles and other property, and delivering up or identifying the location of the company's book and records. I am satisfied that there has been a clear concealment of property in that regard.
25 It is apparent that Mr Rebelo must have possession of some books and records of the company, because, at minimum, he has been provided with some records by the former accountant. In any event, as the company's sole director, he would ordinarily have access to a number of books and records of the company.
26 I infer that books and records and other property of MAP as listed in the schedule to the proposed warrant are likely to be held at either the Jandakot address or the Uduc addresses, those being the properties that Mr Rebelo appears to utilise, having regard to the location of vehicles and the sign on the Uduc properties.
27 The evidence also supports an inference that the company vehicles, when not in use, are likely to be at either of those addresses.
28 I note that the Amarok (being a Volkswagen ute) is not the subject of the warrant but, according to counsel, is owned by a related company that is controlled by Mr Rebelo. In this regard I take into account the evidence that Mr Davie was told by the Mercedes Benz collection agent that 'Mr Rebelo drives a VW ute'. It therefore appears that the Rebelo family will retain access to a vehicle once the warrant is executed.
[9]
Consideration - affidavit deposing as to whereabouts of vehicles
29 The liquidator also seeks an order pursuant to s 597A of the Corporations Act that Mr Rebelo, within 14 days of service of the various court documents (and so following the execution of the warrant), file an affidavit containing information about the whereabouts or last known whereabouts of any outstanding vehicles and the keys.
30 In circumstances where such an application is made by the liquidator, and Mr Rebelo is an officer of the company, the Court has no discretion to refuse an application under s 597A of the Corporations Act: Re Kala Capital Pty Ltd [2013] NSWSC 1982 at [3] (Brereton J). However, the Court must be satisfied that the information requested relates to the examinable affairs of the company and that the time for filing the affidavit is reasonable in the circumstances: s 597A(1)(a) and (c). I am satisfied that is the case.
[10]
Ex parte hearing and suppression orders
31 It was appropriate that the matter proceed ex parte, in view of the nature of the application and the potential that notice of the possibility of the issue of a warrant may frustrate the purpose of any warrant that is issued.
32 I have already made orders upon the request of the liquidator suppressing access to and the publication of the interlocutory application and affidavits of Mr Davie and the liquidator filed in support. Those orders will now be discharged and replaced by orders made today.
33 I made the previous orders and now make these further suppression orders on the basis of s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth), as in my view they are necessary to prevent prejudice to the proper administration of justice. The application was made in a proceeding in which Mr Rebelo is a party. In light of the difficulty the liquidator has encountered in obtaining the property, books and records of the company, including in his interactions with Mr Davie, it is possible that Mr Rebelo may hinder the liquidator's efforts to recover the company's property, books and records by execution of the warrant. If that were to occur, it would amount to conduct which would prejudice the proper administration of justice.
[11]
Orders
34 There will be orders accordingly, together with liberty to apply to relist the proceedings on two business days' notice.
35 These reasons will be provided in judgment form to the applicant and District Registrar today, but will otherwise be suppressed from further publication until served in accordance with the orders.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith.
Parties
Applicant/Plaintiff:
Mohen (Liquidator), in the matter of MAP Exports Pty Limited (in liq)