Mohen (Liquidator), in the matter of MAP Exports Pty Limited (in liq) v Rebelo

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.

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].

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.

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.

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.

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.

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.

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.

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.

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.