Palmer v Parbery & Ors; QNI Metals Pty Ltd & Ors v Parbery & Anor [2019] QCA 27

SUPREME COURT OF QUEENSLAND

CITATION: Palmer v Parbery & Ors; QNI Metals Pty Ltd & Ors v Parbery & Anor [2019] QCA 27

PARTIES: In Appeal No 6047 of 2018: / CLIVE FREDERICK PALMER / (appellant) / v / STEPHEN JAMES PARBERY AND MICHAEL OWEN IN THEIR CAPACITIES AS LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD (CONTROLLER APPOINTED) (IN LIQ) / ACN 009 842 068 / (first respondent) / QUEENSLAND NICKEL PTY LTD (CONTROLLER APPOINTED) (IN LIQ) / ACN 009 842 068 / (second respondent) / In Appeal No 6561 of 2018: / QNI METALS PTY LTD / ACN 066 656 175 / (first applicant/appellant) / QNI RESOURCES PTY LTD / ACN 054 117 921 / (second applicant/appellant) / MINERALOGY PTY LTD / ACN 010 582 680 / (third applicant/appellant) / PALMER LEISURE AUSTRALIA PTY LTD / ACN 152 386 617 / (fourth applicant/appellant) / PALMER LEISURE COOLUM PTY LTD / ACN 146 828 122 / (fifth applicant/appellant) / FAIRWAY COAL PTY LTD / ACN 127 220 642 / (sixth applicant/appellant) / CART PROVIDER PTY LTD / ACN 119 455 837 / (seventh applicant/appellant) / COEUR DE LION INVESTMENTS PTY LIMITED / ACN 006 334 872 / (eighth applicant/appellant) / COEUR DE LION HOLDINGS PTY LTD / ACN 003 209 934 / (ninth applicant/appellant) / CLOSERIDGE PTY LTD / ACN 010 560 157 / (tenth applicant/appellant) / WARATAH COAL PTY LTD / ACN 114 165 669 / (eleventh applicant/appellant) / v / STEPHEN JAMES PARBERY AND MICHAEL OWEN IN THEIR CAPACITIES AS LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD (CONTROLLER APPOINTED) (IN LIQ) / ACN 009 842 068 / (first respondent) / QUEENSLAND NICKEL PTY LTD (CONTROLLER APPOINTED) (IN LIQ) / ACN 009 842 068 / (second respondent)

FILE NO/S: Appeal No 6047 of 2018 / Appeal No 6561 of 2018 / SC No 6593 of 2017 / SC No 3849 of 2016

DIVISION: Court of Appeal

PROCEEDING: General Civil Appeals

ORIGINATING COURT: Supreme Court at Brisbane – [2018] QSC 107 (Bond J)

DELIVERED ON: 22 February 2019

DELIVERED AT: Brisbane

HEARING DATE: 20 September 2018

JUDGES: Fraser and Gotterson and McMurdo JJA

ORDERS: In Appeal No 6561 of 2018: / Appeal dismissed with costs. / In Appeal No 6047 of 2018:

CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DETENTION, INSPECTION AND PRESERVATION – FREEZING ORDERS – where company in liquidation – where liquidators commenced proceedings against former directors and certain companies within the corporate group – where liquidators were successful in an application for freezing orders and ancillary orders – where the primary judge found that there was a good arguable case that Mr Palmer was a shadow director – where the primary judge found that there was a good arguable case that Mr Palmer breached company statutory and general law duties – whether the primary judge erred in finding that there was a good arguable case – whether a good arguable case requires a finding of fact on the balance of probabilities / PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DETENTION, INSPECTION AND PRESERVATION – FREEZING ORDERS – where company in liquidation – where liquidators commenced proceedings against former directors and certain companies within the corporate group – where liquidators were successful in an application for freezing orders and ancillary orders – where the primary judge found that there was a good arguable case that certain transactions involving the company in liquidation could be set aside as uncommercial and insolvent transactions – where the primary judge found that there was a good arguable case that the appointment and subsequent decisions of a controller of the company in liquidation were invalid – whether the primary judge erred in finding that there was the requisite danger that a judgment would be unsatisfied because assets would be dissipated – whether an applicant seeking a freezing order must prove that the purpose of a likely disposition is to put the other party’s assets beyond the applicant’s reach – whether an inference of a risk of dissipation should be determined by the standard of a prudent, sensible commercial person – whether the evaluation of the existence of the risk of dissipation should be conducted in a manner analogous to the approach taken in applications for interlocutory injunctions / PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DETENTION, INSPECTION AND PRESERVATION – FREEZING ORDERS – where company in liquidation – where liquidators commenced proceedings against former directors and certain companies within the corporate group – where liquidators were successful in an application for freezing orders and ancillary orders – whether the primary judge erred in finding that it was in the interests of justice that a freezing order be made – whether the primary judge properly considered the appellants’ evidence of reputational damage that would be caused by the making of a freezing order – whether a freezing order should not have been made because the assets frozen were more than twice the value of impugned payments and outstanding liabilities / PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DETENTION, INSPECTION AND PRESERVATION – FREEZING ORDERS – where company in liquidation – where liquidators commenced proceedings against former directors and certain companies within the corporate group – where liquidators were successful in an application for freezing orders and ancillary orders – where the primary judge set aside and then replaced certain orders because a party was not given a proper opportunity to make submissions about them – whether the primary judge failed to give adequate reasons – whether the primary judge’s amendment to a freezing order and accompanying reasons for that amendment cured the failure to provide reasons for certain orders in the original freezing order – whether the primary judge failed to provide adequate reasons by not stating whether the freezing order was made pursuant to the Court’s inherent jurisdiction or the powers conferred by the / APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – POWERS OF COURT – FURTHER EVIDENCE – where Mr Palmer filed an application to adduce further evidence as to his financial position – where Mr Palmer was self-represented – where Mr Palmer’s companies were represented and shared his personal interest on most issues – where the evidence was extensive and no reason was provided as to why it was not tendered in the primary proceeding – whether the Court should receive the further evidence / COURTS AND JUDGES – JUDGES – DISQUALIFICATION FOR INTEREST OR BIAS – GENERALLY – where the primary judge raised a matter of concern about Mr Palmer’s testimony in the absence of Mr Palmer – where the primary judge provided Mr Palmer an opportunity to, in effect, re-examine himself – where the primary judge refused an application to adduce further evidence – where the primary judge disclosed a conversation that concerned a communication between another judge of the Supreme Court and a judge of the Federal Court – where the primary judge granted an adjournment – where the primary judge made unqualified findings of fact – whether the circumstances indicated actual or apparent bias affecting the disposition of the applications for freezing orders – whether the primary judge ought to have recused himself for denying a party procedural fairness / 1999 (Qld), r 260A, r 260D, r 766 / (2011) 81 NSWLR 47; [2011] NSWCA 109, applied / [1990] 1 Qd R 135; [1989] QSCFC 41, followed / [2017] 3 WLR 1131; [2017] EWCA Civ 92, explained / [1984] 1 All ER 398, considered / [1982] 1 NSWLR 264, considered / [1979] QB 645, explained / [2006] 1 Lloyd’s Rep 401; [2005] EWHC 2666 (Comm), considered

COUNSEL: No appearance for the appellant in Appeal No 6047 of 2018 / D F Jackson QC, with T R March, for the applicants/appellants in Appeal No 6561 of 2018 / T Sullivan QC, with M Hickey, for the respondents

SOLICITORS: No appearance for the appellant in Appeal No 6047 of 2018 / Alexander Law for the applicants/appellants in Appeal No 6561 of 2018 / King & Wood Mallesons for the respondents

1. FRASER JA: I agree with the reasons for judgment of McMurdo JA and the orders proposed by his Honour.

2. GOTTERSON JA: I agree with the orders proposed by McMurdo JA and with the reasons given by his Honour.

3. McMURDO JA: These appeals seek to overturn freezing orders made against the appellants who are some of the defendants in a proceeding brought by the respondents in the Trial Division (“the Judgment”).¹ Their claims arise from the liquidation of the respondent company (“Queensland Nickel”). The other respondents to the appeal, Mr Parbery and Mr Owen, are special purpose liquidators of that company.

4. Queensland Nickel was the manager of a nickel mining and refining joint venture of which two of the appellants, QNI Resources Pty Ltd (“QNI Resources”) and QNI Metals Pty Ltd (“QNI Metals”), were the joint venturers. The joint venture was governed by the terms of a deed executed in 1992 (the “Joint Venture Agreement”), which provided for the appointment of Queensland Nickel as the manager on terms that included a covenant by it not to carry on or be interested in any other business, activity or operation. In 1995, QNI Resources and QNI Metals became the joint venturers, holding shares of 80 per cent and 20 per cent respectively. In about 2009, entities controlled by the appellant Mr Palmer acquired a 100 per cent interest in the joint venturers, which in turn own all of the shares in Queensland Nickel.

5. In March 2016, the joint venturers terminated the appointment of Queensland Nickel. By that stage, it was in voluntary administration, and on 22 April 2016 it became subject to a creditors’ voluntary winding up. Its administrators became its liquidators, who were described in the Judgment as the general purpose liquidators.² On 18 May 2016, the Federal Court appointed Mr Parbery, Mr Owen and another³ as special purpose liquidators of the company.

6. The respondents’ proceeding was commenced in June 2017, after which the case was consolidated with other proceedings, with the result that the general purpose liquidators were added as plaintiffs.

7. The defendants in the proceeding are Mr Palmer, along with two other individuals who are Mr Mensink and Mr Ferguson, and 19 companies including QNI Metals and QNI Resources. The freezing orders were sought and obtained against Mr Palmer, QNI Metals, QNI Resources and nine other companies. Mr Palmer is a director and the ultimate beneficial owner of those 11 companies. In the appeals, the companies are legally represented, but Mr Palmer is not.

The role of Queensland Nickel

12. I have referred to the Joint Venture Agreement, but the relationship between Queensland Nickel and the joint venturers was also governed by an Administration Agreement. This agreement required Queensland Nickel to provide certain services, which included managing the debtors of the joint venturers from the sale of nickel products, such as by collecting payment of those debts. This agreement provided that all costs, liabilities and expenses incurred by Queensland Nickel in the performance of its obligations under the agreement would be paid or reimbursed by the joint venturers in the proportions of their respective interests and would be deemed to be Joint Venture Expenses under the Joint Venture Agreement. This provision enabled Queensland Nickel to make “calls” on the joint venturers to meet expenses of that kind and obliged the joint venturers to contribute their share of the funds once a call was made. The Joint Venture Agreement required Queensland Nickel to deposit such monies to a bank account in the name of Queensland Nickel with the money in the account belonging to the joint venturers and being applied to meet joint venture expenses “to the intent that calls made … be reduced to the maximum extent possible.”

13. As already noted, from about 2009, Mr Palmer held a 100 per cent interest in the two joint venturers which in turn owned Queensland Nickel. He was a director of the joint venturers for periods in 2013, 2014 and 2015 and he was a director of Queensland Nickel during the following periods:(a)31 July 2009 to 30 January 2013;(b)17 April 2013 to 5 April 2014;(c)22 January 2015 to 16 February 2015; and(d)8 February 2017 to 4 May 2017.⁵

14. The evidence featured something which was described as the “green notebook” and which emerged during the liquidators’ public examinations of Mr Palmer in 2016. It contained handwritten entries made by Mr Palmer over a period from August 2009 to May 2016, apparently recording resolutions at meetings of what was called the joint venture owners committee (“JVOC”). The Joint Venture Agreement provided that Queensland Nickel was subject to the directions of the JVOC which was to determine policies and strategies for the conduct of the joint venture. It is Mr Palmer’s case that it was in his capacity as the validly appointed chair of the JVOC, rather than as a director of Queensland Nickel, that he gave directions to that company.

15. The liquidators’ case is that Mr Palmer’s actions were those of a director of Queensland Nickel as defined in s 9 of the Corporations Act 2001 (Cth) (the “CA”). The liquidators’ case is that, even during the periods when Mr Palmer was not appointed to the position of a director, he was a director because he was acting in the position of a director or because the appointed directors were accustomed to act in accordance with his instructions or wishes.

to make loans and receive loans to and from Palmer companies;

to forgive loans;

to invest in Palmer companies or projects as the joint venturers proposed;

to support Mr Palmer and his activities as he might direct or require from time to time;

to provide guarantees and/or security for or to Palmer companies;

to make political donations as directed by Mr Palmer;

to direct Queensland Nickel to do all things necessary to support any activity of the Palmer companies;

to second staff and provide support for all Palmer companies from the joint venture;

to give support and assistance to the Palmer companies; and

to do any matter or thing requested or required by Mr Palmer to assist the Palmer Companies or any other party as Mr Palmer might direct.

17. The primary judge, about this suggested agreement to vary the scope of the joint venture, observed that:⁷

“Putting to one side the question whether that could have been a proper exercise of power by Mr Palmer in each of those capacities, I agree with the plaintiffs’ submission that the amendments sought to enable Mr Palmer, with no oversight at all, to require Queensland Nickel to transfer Joint Venture Property (including monies held in Queensland Nickel’s bank accounts) to almost any recipient on his whim. And, importantly, that was so regardless of whether or not he was formally appointed as a director of Queensland Nickel at the time.”

18. The primary judge said that there were “good reasons to doubt the reliability of the green notebook as a contemporaneously-created record of the matters with which it purports to deal.”⁸ His Honour listed those reasons which included the inherent unlikelihood that an experienced businessman and company director, on “matters of such moment … would have thought it appropriate to keep records and agreements written in pencil on a notebook”, and the fact that, as Mr Palmer had conceded in the liquidators’ examination, he had not disclosed to anyone (except possibly to Mr Mensink, another director of Queensland Nickel and the joint venturers for various periods) either the existence of the notebook or the amendments to the Joint Venture Agreement which were purportedly recorded in it.

19. According to evidence from Mr Parbery, Queensland Nickel’s only role was acting as general manager for the joint venture and it did not carry on a separate business in its own capacity. Its employees were engaged solely for the purpose of operating and managing the joint venture property which primarily consisted of the nickel refinery.⁹ Mr Parbery’s evidence was that Queensland Nickel had bank accounts in its own name into which it deposited the proceeds of sale of the refinery’s product and from which it discharged liabilities and his investigations did not reveal the existence of a bank account of either joint venturer into which receipts were deposited or from which joint venture expenses were paid.¹⁰

20. Mr Parbery’s evidence was that at no time from 2009 did Queensland Nickel employ the mechanisms available to it under the Joint Venture Agreement to make calls upon the joint venturers before it incurred liabilities. Instead, to the extent that it discharged its liabilities, it did so from the proceeds of sale of the product of the refinery. The primary judge said that this evidence was corroborated by evidence given by Mr Mensink (in another hearing) as well as by an affidavit by a Mr Wolfe who was Queensland Nickel’s chief financial officer.¹¹

Payments by Queensland Nickel

21. As the primary judge detailed, in the four year period from 30 June 2011 Queensland Nickel made payments or transfers totalling more than $200 million to Mr Palmer, his associates or entities controlled by him.¹²

22. Mr Parbery’s evidence was that, based on the investigations by him and his staff of the books and records of Queensland Nickel, the payments and transfers did not appear to have been made for the purpose of the joint venture.¹³ The primary judge detailed these payments and transfers in a table extending over several pages of the Judgment, in which he set out the relevant date or period of the transaction, the amount involved and the relevant circumstances.¹⁴ The table explains the basis for the particular monetary limits in the orders made against most of the appellants.

23. The appellants Palmer Leisure Coolum Pty Ltd, Coeur de Lion Investments Pty Ltd and Coeur de Lion Holdings Pty Ltd were ordered not to remove from Australia or in any way to dispose of, deal with or diminish the value of any of their assets in Australia up to an aggregate unencumbered value of $67,039,694.27, until judgment or further order. That amount is referrable to the groups of payments shown in the table as payments made by Queensland Nickel for the benefit of the business known as the Palmer Coolum Resort.

24. A restraint in the same terms was imposed upon Mineralogy Pty Ltd (“Mineralogy”), in the amount of $14,458,217.94, which counsel for the corporate appellants explained was referrable to payments made to that company between June 2014 and January 2016, broadly for the benefit of Mineralogy’s mining tenements.

25. A restraint was imposed in identical terms against Palmer Leisure Australia Pty Ltd in the amount of $375,000, which was a payment made to it in February 2015 at the request of Mr Palmer.

26. The restraint imposed in the same terms upon Fairway Coal Pty Ltd was in the amount of $9,163,066.73, which was the aggregate of amounts paid to that company between June 2011 and September 2012 and (as to $401,231) on 30 June 2015 to meet expenses of what was called the Styx Basin Joint Venture.

27. The same restraint imposed upon Cart Provider Pty Ltd, in the amount of $324,999.68, was the amount of a payment made by Queensland Nickel on behalf of that company for the purchase by it of golf carts for its business in May 2015.

28. The restraint upon Closeridge Pty Ltd, in the amount of $77,800, represented a payment to a car dealer for the price of a car purchased either for Mr Palmer or that company in March 2015.

Mr Palmer’s influence over Queensland Nickel

34. The primary judge found that there was a good arguable case that during the periods when Mr Palmer was not formally appointed as a director of Queensland Nickel, he was a director as defined in the CA because the appointed directors were accustomed to act in accordance with his instructions or wishes.¹⁵ Mr Palmer challenges that finding.

35. The primary judge referred to the testimony of Mr Mensink, who was a director of Queensland Nickel for periods in 2012, 2013, 2014 and 2015 and was the sole director of the company by the beginning of 2016, as well as the sole director of QNI Resources and QNI Metals. Before another judge on an interlocutory application, Mr Mensink had testified that Queensland Nickel acted in accordance with Mr Palmer’s directions, even when he was not formally appointed as a director.¹⁶ The primary judge also referred to the testimony of Mr Wolfe (when he had been examined by the liquidators) that, throughout 2015, Mr Palmer commonly gave instructions to him about the operations of Queensland Nickel and maintained a tight control on his approval of expenditure by the company, retaining to Mr Palmer the ability to approve new contracts entered into by it.¹⁷

36. The primary judge said that the evidence of Mr Parbery about Mr Palmer’s position as an authorised signatory for Queensland Nickel and of particular conduct and correspondence of Mr Palmer indicated “the requisite degree of control”. His Honour referred also to the facts of Mr Palmer’s ownership of the joint venturers and (through them) Queensland Nickel. Further, his Honour notes that there was evidence which suggested that Mr Palmer regarded the assets of private companies owned directly or indirectly by him as sufficiently within his control to be broadly his with which to deal.¹⁸

37. Against that substantial body of evidence, there had to be considered Mr Palmer’s case, which was that his influence over Queensland Nickel came from the exercise of his powers in his capacity as the chair of the JVOC, so that his instructions provided to Queensland Nickel were instructions on behalf of the joint venturers in the exercise of their contractual rights.¹⁹

38. Mr Palmer’s case relied upon observations by Hodgson JA in Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd, when considering whether the influence of a mortgagee on the directors of a mortgagee company was such as to have made the mortgagee a shadow director. Hodgson JA there said that where a mortgagee, acting in its own interest, exercised an influence on directors with the support of contractual rights in its mortgage documents, that would not generally constitute the mortgagee a shadow director because it would remain for the directors to make their own decision as to whether the company should act in accordance with the instructions of the mortgagee. Justice Hodgson said that the position would be different “if it appeared that, at least for some decisions, the directors were treating the mortgagee’s instructions or wishes as themselves being a sufficient reason so to act.” Referring to that observation by Hodgson JA, the primary judge here said that the evidence supported the conclusion that there was a good arguable case that the directors of Queensland Nickel treated Mr Palmer’s instructions or wishes in that way.

A good arguable case against Mr Palmer

42. The respondents’ case is that, as a director of Queensland Nickel, Mr Palmer owed to the company statutory and general law duties to ensure that the property of Queensland Nickel was used only for the purposes of the joint venture and not for the benefit of Mr Palmer or other entities which he controlled. The payments totalling more than $200 million are alleged in each case to be the result of a breach by Mr Palmer of these duties and to have resulted in a loss to Queensland Nickel because the amount has not been repaid.

43. Mr Palmer’s argument is that in no case was the payment or transfer an application of the funds or property of Queensland Nickel; rather, it was an application of funds that belonged to the joint venturers about which they have made no complaint. According to the written submissions for Mr Palmer, as the funds were owned by the joint venturers, any claims in respect of them by Queensland Nickel “are capable of being summarily dismissed and do not disclose a good arguable case.”²⁵ Mr Palmer says Queensland Nickel could have no claim against any of the appellants because it did not own the money which it paid away.

44. His argument emphasises the evidence of the audited financial statements of the joint venturers. There were no separate financial statements for Queensland Nickel itself, but Mr Palmer argues that by reference to the accounts for the consolidated group (which included the joint venturers and Queensland Nickel) and to the financial statements for the joint venturers, it can be seen that Queensland Nickel had no assets of its own.

45. In discussing the terms of the Joint Venture Agreement, the primary judge observed that the effect of the provisions dealing with the “call process” (by which Queensland Nickel was able to call upon the joint venturers to provide funds) was that monies so provided to Queensland Nickel would be placed in its bank account, to be held on trust by it. More generally, his Honour accepted that Queensland Nickel was a trustee of any funds in its hands so that those monies the subject of the transactions, totalling more than $200 million, were trust monies. But those circumstances do not preclude the recovery by Queensland Nickel of money from a person to whom or for whose benefit a payment was made on the recovery from Mr Palmer of the amount of the payment as compensation for his breach of a director’s duty. As a trustee, Queensland Nickel would have its own interest in the money distinct from that of the joint venturers because of its right to use trust funds to discharge liabilities it incurred as a trustee.²⁶

46. Mr Palmer’s argument refers to s 1305 of the CA, which provides that a book kept by a body corporate under a requirement of the CA is admissible in evidence in any proceeding and is prima facie evidence of any matter stated or recorded within it. But if the effect of the accounts was, as Mr Palmer argues, that they stated or recorded that Queensland Nickel had no assets, that evidence was to be considered against the other evidence.

Was there a risk of the relevant kind?

50. By r 260A and r 260D(3) UCPR, a freezing order may be made if there is a demonstrated danger that a prospective judgment will be wholly or partly unsatisfied because the debtor might abscond or (relevantly here) because the assets of the debtor might be removed, disposed of, dealt with or diminished in value.

51. The corporate appellants argue that the primary judge misstated, and misapplied, the correct test. It is submitted that the test has these characteristics:(a)what must be demonstrated is a danger, or a real risk, that a prospective judgment will be wholly or partly unsatisfied because assets might be dissipated; and it is not enough for a plaintiff to simply assert a risk;(b)it must be a likelihood of danger which in the circumstances justifies the freezing order; and(c)that likelihood must be demonstrated on “solid” evidence.²⁹

52. None of that is controversial, but something should be said about the third of them, which comes from the statement of Mustill J (as he then was) in Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft GmbH, as follows:³⁰

“It is not enough for the plaintiff to assert a risk that the assets will be dissipated. He must demonstrate this by solid evidence. This evidence may take a number of different forms. It may consist of direct evidence that the defendant has previously acted in a way which shows that his probity is not to be relied on. Or the plaintiff may show what type of company the defendant is (where it is incorporated, what are its corporate structure and assets, and so on) so as to raise an inference that the company is not to be relied on. Or, again, the plaintiff may be able to found his case on the fact that inquiries about the characteristics of the defendant have led to a blank wall. Precisely what form the evidence may take will depend on the particular circumstances of the case. But the evidence must always be there.”

53. The primary judge discussed the test to be applied with extensive reference to the authorities at [27] through [39] of the Judgment. In particular, he referred to Patterson v BTR Engineering (Aust) Ltd, where Gleeson CJ said:³¹

“The remedy is discretionary, but it has been held that, in addition to any other considerations that may be relevant in the circumstances of a particular case, as a general rule a plaintiff will need to establish, first, a prima facie cause of action against the defendant, and secondly, a danger that, by reason of the defendant’s absconding, or of assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied.

…

It is not difficult to imagine situations in which justice and equity would require the granting of an injunction to prevent dissipation of assets pending the hearing of an action even though the risk of such dissipation may be assessed as being somewhat less probable than not.”

54. At [32] of the Judgment, the primary judge recorded a submission for the defendants that what had to be proved was according to what was said in the English Court of Appeal in Candy v Holyoake, as follows:³²

“There must be a real risk, judged objectively, that a future judgment would not be met because of unjustifiable dissipation of assets. But it is not every risk of a judgment being unsatisfied which can justify freezing order relief.”

(Emphasis added.)

55. Referring to that statement, the primary judge considered that the use of the word “unjustifiable” would invite an enquiry into a defendant’s purpose or motivation in dealing with its assets, and that the weight of authority in Australia supported the view that a plaintiff seeking a freezing order does not have to show that the purpose of the defendant’s conduct is to prevent recovery of the amount of any judgment.³³ But in my respectful view, this was not the sense in which the word “unjustifiable” was used in the above passage. Lady Justice Gloster there cited Gee on Commercial Injunctions (6th Edition) at 12 [12-032], and a reference to that text and the cases cited under the heading “Unjustifiable Disposals” shows what Gloster LJ meant by the expression. Not every disposition of a defendant’s property might be unjustifiable so that the payment of ordinary trading debts, which might affect ultimately the recovery of the plaintiff’s judgment, would not be an unjustifiable disposal in this sense. But that is not to say that an applicant must prove that the purpose of a likely disposition is to put the defendant’s assets beyond the plaintiff’s reach. In one of the authorities cited in the text, TTMI Ltd of England v ASM Shipping Ltd of India, the point was described as follows:³⁴

“[25] The purpose of the Mareva jurisdiction is sometimes referred to as the prevention of the “dissipation of assets”. Without explanation that phrase is, itself, obscure. As Colman J stated in Gangway Ltd v Caledonian Park Investments (Jersey) Ltd (2001) 2 Lloyd’s Rep 715 the underlying purpose of the jurisdiction is not to provide a claimant with security for its claim but to restrain a defendant from evading justice by disposing of assets otherwise than in the ordinary course of business so as to make itself judgment proof with the result that any judgment or award in favour of the claimant goes unsatisfied. The purpose is not to provide security for the claimant in respect of his claim. It is well established that it is not necessary to establish that the defendant is likely to act with the object of putting his assets beyond reach. What has to be shown is that there is, absent an injunction, “a real risk that a judgment or award in favour of the plaintiffs would go unsatisfied”: The “Niedersachsen” [1983] 2 Lloyd’s Rep 600. That formulation cannot, however, be regarded as a complete statement of the law. A defendant may be likely to make perfectly normal dispositions, such as the payment of ordinary trading debts, the effect of which may be that, when any award is made, it is, in whole or in part unsatisfied when, absent those payments, it might have been satisfied or satisfied to a greater extent. Something more than a real risk that the judgment will go unsatisfied is required.”

(Emphasis added.)

56. To the same effect, the New South Wales Court of Appeal (Street CJ, Hope JA and Rogers AJA) said in Riley McKay Pty Ltd v McKay:³⁵

“[T]he jurisdiction to grant the [Mareva] injunction is not to be exercised simply to preclude a debtor from dealing with his assets, and in particular to prevent him from using them to pay his debts in the ordinary course of business. It is directed to dispositions which do not fall within this category and which are intended to frustrate, or have the necessary effect of frustrating, the plaintiff in his attempt to seek through the court a remedy for the obligation to which he claims the defendant is subject.”³⁶

57. As I will discuss, there were transactions, or attempted transactions, in the present case which were extraordinary by any measure and which met, or would have met, the description of an unjustifiable disposal or dissipation of an asset in this sense.

58. At [39] of the Judgment, the primary judge said that:

“[T]here must be facts from which a prudent, sensible commercial person could properly infer the existence of the relevant risk of frustration”

for which his Honour cited Third Chandris Shipping Corporation v Unimarine SA (“Third Chandris”),³⁷ adding that the relevant statement in that case had been approved by the Full Court of the Federal Court in Hua Wang Bank Berhad v Deputy Commissioner of Taxation,³⁸ and by the New South Wales Court of Appeal in Severstal Export GmbH v Bhushan Steel Ltd.³⁹

59. The submissions for Mr Palmer criticise the use of the standard of a “prudent, sensible commercial person”. It is said that instead the primary judge should have applied “an objective standard” to assess whether there was a risk of the relevant kind. In my view, the submission misunderstands what was said by Lawton LJ in Third Chandris.

60. Lord Justice Lawton discussed the way in which judges may draw inferences about the relevant risk and likened the process to that followed by “honest commercial men [who] have to learn to spot those who are likely to be defaulters.” His Lordship said:⁴⁰

“What [commercial men] have to do is to find out all they can about the party with whom they are dealing, including origins, business domicile, length of time in business, assets and the like; and they will probably be wary of the appearances of wealth which are not backed up by known assets. In my judgment the Commercial Court should approve applications for Mareva injunctions in the same way.”

61. The effect of these passages from Third Chandris is not that there are distinct degrees of risk, one which a court would recognise and another which would be recognised by prudent, sensible commercial people. Rather, it is that a court assesses the risk by a pragmatic view of the facts and circumstances in a commercial context. In my opinion, that is what the primary judge did in this case.

62. The corporate appellants make a different criticism of that passage of the Judgment. They argue that, throughout the Judgment, the primary judge reasoned by reference not to what the prudent, sensible commercial person would infer, but by reference to what that person might infer. It is true there were statements to that effect: for example at [262] of the Judgment. Nevertheless, the primary judge ultimately concluded that there was a real risk of Mr Palmer entering into colourable transactions, which, when discovered, would operate to inhibit or to frustrate the enforcement or execution processes.⁴¹ His Honour said that “[t]he relevant aspects of Mr Palmer’s previous conduct which justify this conclusion have either been proved before me in this application, or to the extent that the facts or their proper characterization are disputed, my qualitative evaluation of the evidence as a whole supports the conclusion I have expressed.”

The Waratah Coal and China First transactions

63. In my view, the appellants have not demonstrated a misunderstanding by the primary judge as to the risk of dissipation which the plaintiffs had to demonstrate. The question then is whether his Honour misapplied the test. To consider that issue, it is necessary to go to the evidence of what the primary judge described as the Waratah Coal transaction, the China First transaction and the Martino appointment and Martino settlement deeds.

64. In early 2016, Queensland Nickel engaged PwC to advise about restructuring options in circumstances which included demands being made by Aurizon for security for an amount exceeding $80 million owed to it by the company. Aurizon told PwC that the required security (or further security) had to be provided by a source outside the group of companies of which Queensland Nickel was a member, and that it could not be tied to the sale of the coal assets. Aurizon also told PwC that, if satisfactory security was not provided, it would deny Queensland Nickel access to the rail lines which were necessary for the refinery’s operation, of which the likely consequence would be that Queensland Nickel would be forced into voluntary administration. PwC reported that Aurizon was adamant that there was no scope for further negotiations: security satisfactory to Aurizon had to be provided. The primary judge said that there was a good arguable case that it must have been obvious to Queensland Nickel that it was indeed necessary to provide Aurizon with security of the kind which it had stipulated.⁴²

65. PwC advised that there had to be urgent consideration by Queensland Nickel of what security might be offered. PwC further advised that, from its discussions with potential financiers, there was a “genuine interest in proceeding to the next stage of due diligence”, but that it was necessary that Queensland Nickel remain out of voluntary administration whilst the due diligence proceeded.

66. It was in these circumstances that, on 13 January 2016, the China First transaction and the Waratah Coal transaction were effected.

67. Waratah Coal Pty Ltd owned two exploration permits for coal (“EPCs”) in the Galilee Basin. Mineralogy was the ultimate holding company of Waratah Coal and Mr Palmer was the beneficial owner of all the issued shares in Mineralogy.⁴³ China First Pty Ltd (“China First”) and Waratah Coal were parties to a Mining Right Agreement dated 8 July 2009, by which China First had the right to mine the coal within the area of the EPCs, conditional upon Waratah Coal being granted a right to do so under the Mineral Resources Act 1989 (Qld). The agreement could be terminated by Waratah Coal if China First did not commence development operations within seven years of the date of the agreement. Consequently, as at January 2016, China First’s rights under the agreement were susceptible to a termination by Waratah Coal if it did not commence development operations by July 2016.

The Martino appointment and Settlement Deed

81. Part of the background to the events involving Mr Martino was a proceeding in the Trial Division which had been brought by Queensland Nickel, at the instance of the general purpose liquidators, against Mineralogy Pty Ltd on 29 March 2017. By that proceeding, Queensland Nickel claimed an amount in excess of $105 million, part of which consisted of unpaid loans made by Queensland Nickel to the company.

82. The primary judge found that Mr Martino was a financial advisor with whom Mr Palmer had done business on several occasions prior to May 2017. And he had been a director of China First for a short time in 2011 and 2012.⁴⁷

83. On 3 May 2017, Mr Palmer’s assistant emailed to Mr Martino a deed signed on that date by Mr Palmer on behalf of China First, which purported to record the appointment of Mr Martino, as an agent of China First, to be the controller of Queensland Nickel. The deed referred to Mr Martino as a registered liquidator, which was incorrect, and a corrected version of the deed was signed on behalf of China First and emailed to Mr Martino early on the afternoon of the same day. Just over an hour later, the document was signed by Mr Martino and emailed back to Mr Palmer.⁴⁸

84. Less than another hour later, Mr Palmer’s assistant sent to Mr Martino a document in the form of a deed between China First and Queensland Nickel which was described as a “Deed of Settlement, Claims, Release, Discharge, Indemnity and Confidentiality”. It had been signed on behalf of China First by Mr Palmer. The primary judge recorded that it was just seven minutes later that Mr Martino’s assistant emailed a scan of the document, signed by him, to Mr Palmer’s assistant, with copies sent to Mr Palmer and his lawyer. The primary judge referred to this document as the “first version of the Martino settlement deed”.⁴⁹

85. By this deed, it was accepted that a debt of $135 million was due and payable by Queensland Nickel to China First and it was agreed that the debt would be reduced to $125 million, in consideration of Queensland Nickel agreeing to discontinue the Mineralogy proceeding and not to make future claims against the company. It was further agreed that upon that proceeding being discontinued, China First and Queensland Nickel would release each other from all claims concerning the Mineralogy proceeding and Queensland Nickel would release all directors and related parties of China First.

86. On the following day, 4 May 2017, what was described by the primary judge as the “second version of the Martino settlement deed” was sent by Mr Palmer’s assistant to Mr Martino, with a request that it be signed and sent back “as soon as you can”. The parties to this document were China First, Queensland Nickel and Mineralogy. It had been signed on behalf of China First and Mineralogy by Mr Palmer. Mr Martino signed it and returned it by email that evening. This second version was different in that Mineralogy had been added as a party and had become subject to the mutual releases and discharges, but otherwise its terms corresponded with the first version. Mineralogy provided no apparent consideration for the release of the claims against it.

The appellants’ arguments as to the existence of a risk

116. In discussing the principles to be applied, the primary judge discussed what should be the approach to the evaluation of the evidence where there were contested questions of fact. His Honour said that, as the application was for alternative forms of interlocutory orders,¹⁰⁹ the determination of the application would not finally dispose of the rights of the parties so that he would not be making findings of fact as would be made at a trial. Rather, his Honour said, his task was to make a “qualitative evaluation” of the evidence in the sense described as McDougall J in Skyworks NSW Pty Ltd v 32 Drummoyne Road as follows:¹¹⁰

“The Court is required to undertake a qualitative evaluation of all the evidence that is available, to see if there is a sufficiently serious risk of frustration to justify the making of a freezing order. Further, the two considerations [namely, (1) whether there is a good arguable case and (2) whether there is a real risk of judgment frustration] should be analysed together (as each may impact on the other), and with an appreciation of both the underlying purpose of the rule and the relative risks of granting or withholding relief – the customary discretionary calculus.”

The judge said that it followed that an application such as this was not, in general, an occasion to determine contested questions of fact and conflicts in affidavit evidence. Instead “the approach which should be taken … is analogous to the approach to be taken in applications for interlocutory injunctions.”¹¹¹ His Honour adopted these observations by Mahoney JA (with whom Glass and Samuels JJA agreed) in Shercliff v Engadine Acceptance Corporation Pty Ltd:¹¹²

“But there are limitations upon the extent to which a judge is to take into account such evidence as the defendant may tender upon an interlocutory application. It is not his function to conduct a preliminary trial of the action, nor is it, in general, to resolve the conflict between the parties’ evidence, and grant or refuse the application upon the basis of such findings. Where there is conflict of evidence, the use which may be made of the defendant’s evidence in determining whether the plaintiff has made out a prima facie case is a limited one. For example, the plaintiff’s evidence, considered alone, may be such a prima facie case as would be acceptable if submitted to a jury in a trial. But, when considered in the light of the defendant’s evidence, it may be explained away so as no longer to be such. Or the defendant’s evidence, when juxtaposed to that of the plaintiff may show that there is in reality no such case, no real question between the parties, appropriate to warrant preserving the status quo until the hearing.”

117. The appellants argue that this approach was erroneous because it was inapt to the determination of the question of whether there was a real risk of dissipation. The corporate appellants accept that the approach may have been apt to apply to the assessment of evidence relevant to the question of whether there was a good arguable case. But it is said that this approach to the evidence on the question of whether there was a real risk of dissipation would tend to shift the onus of proof to the defendants.

118. In my view, the argument cannot be accepted. Notably, the primary judge began this section of the Judgment with a statement that his task was to have regard to all of the evidence before him “and to form a view on whether the plaintiffs have sufficiently discharged their burden on the matters requisite to the making of [the] orders sought …”¹¹³.

119. The determination of whether there exists a sufficiently serious risk of the dissipation of assets involves the evaluation of future possibilities, rather than the ascertainment of historical facts.¹¹⁴ The risk of dissipation might justify an order although the probability of the risk eventuating is less than 50 per cent.¹¹⁵ But, as the risk of dissipation must be a real and not merely a theoretical one, it must have an evidentiary basis. Where a fact is alleged by the plaintiff in support of its case about the risk, but there is contrary evidence from the defendant, must the fact be proved to the court’s satisfaction as if the application for the freezing order was the trial of the case? In my view, a plaintiff need not do so. A freezing order is interlocutory in nature; it does not involve a final determination of the parties’ positions. Usually it is made in circumstances of urgency in which the court is unable to conduct an extensive and conclusive factual inquiry in a way which is fair to both parties. Where the factual basis for the plaintiff’s case about the risk of dissipation is disputed, the risk will commonly have to be evaluated with the recognition that the factual basis for it is in doubt. Nevertheless, the possibility of the plaintiff’s evidence being correct, considered with other facts and circumstances, might mean that there is a sufficiently serious risk of the frustration of the satisfaction of a judgment as to justify the making of a freezing order. In my opinion, the observations in Shercliff, as to the limitations upon the extent to which evidence contradicting the plaintiff’s case will be considered, are apt to an application of the present kind.

120. A further submission for the corporate appellants is that the primary judge reasoned that there was a risk of dissipation by reference of the plaintiffs’ case for final relief, although that case did not involve allegations of serious dishonesty or otherwise indicate that there was a real risk of dissipation. The submission acknowledges that, where the underlying claim involves a prima facie case that the defendant has been dishonest, that factor may be sufficient to raise an inference that there is a risk of dissipation.

“The response to that argument is that I think a prudent, sensible commercial person would regard it to be legitimate to draw inferences about the risk of how the corporate defendants would conduct themselves, by reference to an assessment of the risk of how Mr Palmer would conduct himself. And the risk being addressed is what Mr Palmer might cause to be done by those defendants, to protect his wealth, of which their wealth must form a part.”

And, as already noted,¹¹⁹ the primary judge said that he was untroubled by the failure of the plaintiffs to identify particular transactions which might be entered into because of “the ingenuity of schemes which a potential judgment debtor might devise.”

126. For the most part, the primary judge had to assess the risk of dissipation by a defendant without the benefit of evidence of that defendant’s financial position. His Honour said that although he had some information about the value of assets of the corporate defendants (other than the joint venturers and Mineralogy) he did not have information as to their net assets. He had relatively more information about the joint venturers and Mineralogy. Clearly, the primary judge did not attempt to assess the risk about a certain defendant by an analysis of its own financial circumstances. His Honour’s reasoning was that it was unnecessary to discern a particular means by which the assets of a defendant might be dissipated because the risk might exist without specific potential dealings being able to be identified. What mattered, in his Honour’s view, was Mr Palmer’s ownership and control of the companies and Mr Palmer’s propensity to use that control in order to cause assets to be dissipated. In my view, there was no error.

127. The corporate appellants argue that the primary judge made a number of findings that were unreasonable or unjust, in the sense of House v The King.¹²⁰ The first of them was in respect of the green notebook. As I have discussed,¹²¹ his Honour said that there were good reasons to doubt the reliability of this notebook, which the corporate appellants say was unfair because there was no suggestion of fabrication which was squarely put to Mr Palmer in cross-examination.¹²² In my view, there was no unfairness, this being an interlocutory application in which it was appropriate for the judge to approach the evidence in the way discussed above at [116]. Further, his Honour’s doubt in this respect did not matter for his assessment of whether there was a good arguable case for final relief or whether there was a sufficient risk of dissipation.

128. A similar point is made by the appellants about Mr Martino’s conduct, where the primary judge found that Mr Martino’s evidence was implausible although Mr Martino had not been called for cross-examination. Again however, this was not a trial and the primary judge did not have to make a final determination about the truth of Mr Martino’s evidence. It was open to his Honour to assess Mr Martino’s evidence as unlikely to be true, without seeing that evidence tested by cross-examination.

129. A similar complaint is made by the appellants about the primary judge’s assessment of the evidence of Mr Palmer’s involvement in the Martino appointment. Mr Palmer deposed that he had sought, obtained, and acted on legal advice in making the appointment. The primary judge noted that the “manner in which the lawyer was briefed and the assumptions and instructions on which he was asked to act were not contained in the material” and further noted that, although the lawyer had given “multiple affidavits on other aspects of the application, the lawyer concerned did not address those questions or address the advice which he is said to have given.” Absent that detail, his Honour said, he was not “presently prepared to accept the proposition at face value.”

Was it in the interest of justice that the freezing orders be made?

135. In relation to this third question, the primary judge considered several factors, namely:(a)the prejudice which might be caused by failing to make the orders sought;(b)whether there had been inordinate delay by the plaintiffs in making the application;(c)the absence of a specific undertaking by the plaintiffs to ensure that the proceeding was prosecuted with due expedition;(d)the availability of alternative proceedings or remedies; and(e)the impact of the orders upon the defendants and innocent third parties.

136. The corporate appellants complain overall that the primary judge failed to properly take into account the defendants’ evidence of prejudice, including the reputational stigma which would be caused. But this evidence was not overlooked by the primary judge, and the submission goes no further than a complaint that it was given insufficient weight. The judge considered the effect upon the defendants’ commercial reputations, but was unpersuaded that “further reputational damage would be caused by the making of the orders sought [which was] additional to the reputational damage which must already have been caused by the insolvency of Queensland Nickel and associated termination of employees”.¹²⁹ Further, the primary judge considered that “[t]he evidence of the suggested damage to the businesses conducted by the defendants was similarly unpersuasive, either of its nature (which was either speculative, expressed at a high level of generality, or in argumentative or inflammatory terms), or because it turned on choices which Mr Palmer said he would make if orders were made against him and the defendants (e.g. not to proceed with the itself speculative possibility of his re-opening the Refinery).”¹³⁰ In my view, those circumstances were open to his Honour.

137. It is submitted that the orders which were made were outside the range of those which could justifiably have been made in the circumstances, an argument which characterises the orders as freezing “in total more than twice the impugned payments and more than twice the outstanding liabilities to third party creditors”. It is said that this reveals an error in the exercise of the discretion. The primary judge received a similar submission, which was that he should limit the operation of orders made against all defendants by stating that the orders would not operate to prevent the removal of an aggregate of $219,050,352 measured by reference to the aggregate of the unencumbered value of assets within Australia.¹³¹ In rejecting that argument, the judge accepted the argument in response for the plaintiffs, namely that orders in the terms which were made were justified to ensure that an eventual judgment would not be frustrated, bearing in mind that ultimately the assets of a defendant could not be ordered to be available to satisfy a judgment against another defendant in recognition of “the separate cases against the defendants.” In my view, there was no error in that reasoning.

Mr Palmer’s further arguments

A failure to give reasons?

139. Mr Palmer argues that the primary judge failed to provide reasons, or adequate reasons, in the Judgment. His argument has two limbs. First, he says that no reasons were given by the primary judge for the ancillary orders for the disclosure of Mr Palmer’s assets. Second, he argues that the primary judge was required to, but did not, state the basis upon which the freezing orders were made, that is to say whether they were made pursuant to the inherent jurisdiction of the Court or the powers conferred by the UCPR.

140. The orders which were made upon pronouncement of the Judgment (on 25 May 2018) required, by Order 16, that within seven clear business days, each defendant inform the plaintiffs of all of that defendant’s assets, giving their value, location, and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of that defendant’s interest in each asset. The same order required each defendant, within a further seven days, to provide an affidavit verifying that information. Order 17 qualified that obligation of disclosure so that it would not compromise the privileges against self-incrimination and exposure to a civil penalty.

141. As soon as the Judgment was delivered, the defendants applied for all of the orders to be stayed. Later on the same day, his Honour refused that application but with one exception.¹³³ The exception was for Orders 16 and 17, the operation of which was stayed by consent until further order because of a complaint by counsel for some of the defendants that he had not been given a proper opportunity to make submissions about them.

142. By a further judgment delivered on 11 June 2018 (“June 2018 Judgment”), his Honour acknowledged that there was merit in counsel’s complaint. For that reason, his Honour set aside Order 16 as made on 25 May 2018. But as he noted, the corporate defendants did not oppose a similar order being substituted for it and made submissions only about the timeframe for the disclosure to be made. His Honour accepted that the order to be substituted, as against the corporate defendants, should provide for disclosure, together with the verifying affidavit, within 30 days.¹³⁴

143. In the June 2018 Judgment, the primary judge then set out Mr Palmer’s arguments advancing why such an order, in identical terms to that to be made against the corporate defendants, ought not to be made against him. It is unnecessary to set out here the effect of those arguments or the judge’s reasons for rejecting and for substituting the same order in Mr Palmer’s case. The point is that reasons were then given and Mr Palmer’s submissions in this Court do not claim that they were inadequate.

“[63] What then of r 260D? I make the following observations:

(a)Rule 260D confers on the Court a power to make freezing orders and ancillary orders which is specifically constrained.

(b)Putting to one side orders sought in aid of judgments from other courts, or against third parties, the constraints are (1) the applicant has the good arguable case referred to in r 260D(2), and (2) the court is satisfied, having regard to all the circumstances, of the matters referred to in r 260D(3). Those matters cover the same ground as the first two considerations which are relevant in the exercise of the inherent jurisdiction. No mention is made of the third (interests of justice) consideration, but it could hardly be thought that the discretion conferred by the rule was intended to be exercised without having regard to that subject matter.

(c)It is notable that r 260D(3)(b) is also not worded in a way which would suggest any departure from the inherent jurisdiction’s focus on the effect rather than the purpose of the defendant's conduct, occurring or apprehended.”

151. Consequently, his Honour did explain his reasoning as to the basis for these orders. In his view, there was no material difference between the requirements for an order made under the inherent jurisdiction and one made under the specific rules. There is no evident error in that analysis. But all that matters for this ground of appeal is that his Honour did reveal his reasoning and Mr Palmer’s argument to the contrary must be rejected.

Mr Palmer’s arguments about the risk of dissipation

152. Grounds 2(e), (f), (g), (h), (o), (q), (u), and (v) of Mr Palmer’s appeal largely raise arguments which have been already discussed. But two points within Mr Palmer’s written submissions for those grounds require further consideration.

153. The first is a submission that the judge failed to give effect to the established constraint in the exercise of this jurisdiction that it should not be used to give plaintiffs security for the satisfaction of their judgments. His written submissions set out some passages from the cross-examination of Mr Parbery, both by senior counsel appearing for some of the corporate defendants and by Mr Palmer personally, in which there were attempts to have Mr Parbery say that the liquidators were seeking security for the satisfaction of prospective judgments. The passages do not record any concession by Mr Parbery to that effect. And in any event, his Honour was not mistaken as to the proper purpose to be served by the orders which were sought.

154. The second point sought to be made in this part of Mr Palmer’s written submissions is that the primary judge failed to distinguish between the distinct questions of whether there was a good arguable case and whether there was a demonstrated risk, with the consequence that his Honour did not assess whether Mr Palmer’s evidence which sought to explain the impugned conduct, was assessed “objectively as to whether it established [Mr Palmer’s] character was deserving of the conclusion of there being a presently existing danger to the Court’s processes.” That argument cannot be accepted; Mr Palmer’s conduct and his purported explanations for it were relevant to an assessment of the existence of a risk, upon a “qualitative evaluation” of the whole of the evidence, as I have discussed.

Mr Palmer’s arguments on the third question

155. Grounds 2(i), (j), (l), (p) (r), (s), and (t) relate to the third question, namely whether it was in the interests of justice that freezing orders be made in Mr Palmer’s case. Again, much of what is contained in Mr Palmer’s written submissions has already been discussed but something should be said about some of the submissions in this respect.

156. Grounds 2(i) and (j) complain that the primary judge failed to act upon evidence which established that Mr Palmer’s substantial net worth was many times the amount of the claim or claims against him and that, in all the circumstances, “it would simply not be worth [Mr Palmer’s] while to default on an adverse judgment.”¹³⁸ The evidence before the primary judge as to Mr Palmer’s net worth was discussed by his Honour as follows:¹³⁹

“(c) Confidential exhibit 3 was Mr Palmer’s rough estimate of his net worth. The amount was an amount which would have given some weight to the submission. But there was no detail given by Mr Palmer as to how the figure was reached. I do not know, for example, the extent to which the estimate may be informed by treating assessments of the value of mining tenements in the same way as Mr Palmer was prepared to treat the BDO “valuation” of China First’s coal project. Nor do I have any information as to the extent of his personal liabilities. Nor do I have any information, for example, as to the whether he is likely to experience any cash flow pressures either now or in the future. I am not prepared to reach the conclusion which I am invited to reach by the defendants, based on Mr Palmer’s rough estimate of his net worth.”

157. According to Mr Palmer’s submissions, the primary judge ought to have given more weight to that exhibit. The difficulty is that the submission was not developed by reference to the content of the exhibit itself and there is no demonstrated error in the passage from the Judgment which I have set out. Further, as I have said earlier, there was no error in the judge’s reasoning at [285](d) that Mr Palmer’s conduct as an indicator of the relevant risk could not be discounted simply on the basis that Mr Palmer was so wealthy that there was no risk.

158. Mr Palmer filed an application in this Court¹⁴⁰ to adduce further evidence as to his financial position. That was supported by an affidavit affirmed by him on 11 July 2018. There was no written response to that application, but, at the hearing in this Court, counsel for the respondents submitted that this Court should not receive the further evidence because none of the well-established bases for the reception of fresh or new evidence was addressed, let alone established, by Mr Palmer.

159. Rule 766(1)(c) UCPR provides that this Court may, on special grounds, receive further evidence as to questions of fact. Rule 766(2) provides that, for that sub-rule, further evidence may be given without special leave, unless the appeal is from a final judgment, and in any case as to matters that have happened after the date of the decision under appeal. This was not a final judgment, so that further evidence may be allowed without special leave or special grounds. But as Thomas J (as he then was) said in Hawkins v Pender Bros Pty Ltd,¹⁴¹ the power of this Court to receive further evidence upon questions of fact is discretionary, whether or not it is a case that additionally requires “special leave” or “special grounds”, and appeal courts “use their discretion rigidly to control the matters upon which further evidence may be received” because it is in the interests of justice that there be an end to litigation. Mr Palmer’s submissions do not explain why this more detailed evidence as to his financial position was not tendered during the hearing of these applications. Although Mr Palmer was without legal representation, he is not the usual litigant in that position: not only has he the means to afford his own lawyers but his companies are very ably represented, and on this and most issues, they have the same interest. And by this application, he seeks to have this Court consider extensive further evidence, in the form of an affidavit by him, without his presence at the hearing. This is after some nine days of hearing before the primary judge, during which Mr Palmer should have adduced this evidence. I would refuse this application to have it received in this Court.

160. Ground 2(l) claims that the long period of time required for the resolution of the application for freezing orders was “prejudicially long and ought to have counted against the grant of the freezing orders.” It must be said that the length of hearing was exceptionally long for an application of this kind. But the applications were strenuously defended and, having regard to the scope of the respondents’ claims and the amounts involved, this is not a case where a freezing application could have been determined “in hours, not days” as Mr Palmer seems to suggest. Most importantly, Mr Palmer does not explain how the time taken for the resolution of the application was long, so that it should matter as he suggests.

Refusal of an application to re-open

162. Ground 2(k) of Mr Palmer’s appeal says that the primary judge erred in dismissing what is said to have been his application, filed on 28 September 2017, for leave to adduce further evidence which was probative on both the second and third questions and which would not have resulted in any material prejudice to the plaintiffs.

163. It is necessary to set out the course of the application before the primary judge. An application for an interim freezing order was filed on 23 August 2017 which, on that date, was dismissed upon undertakings being given by some of the defendants and with a timetable set for evidence and further submissions for an interlocutory application to be heard on 14 and 15 September 2017. The application was then heard over those two days, which were occupied with oral evidence leaving the final submissions of the parties to be presented on another day. No party then sought to adduce further evidence. Mr Palmer was extensively cross-examined during that two day hearing, at the end of which the Court accepted further undertakings from the parties and the application was adjourned to 17 October for oral submissions. The parties also agreed on a timetable for the filing of further written submissions to address the evidence which had apparently closed.

164. On 29 September 2017, an application was made for leave to adduce further evidence by a solicitor appearing for the joint venturers, Queensland Nickel Sales and China First, but filed on behalf of all defendants. After hearing argument, the primary judge dismissed the application by an ex tempore judgment.

165. The application for the freezing orders resumed on 17 October 2017, when Mr Palmer made a recusal application and applied for an adjournment. The primary judge refused both applications by an ex tempore judgment (the “Recusal Judgment”).¹⁴² The hearing proceeded but was not finalised on 19 October 2017, when the application was adjourned to 30 October 2017 for what was expected to be the final day of the hearing.

166. On 12 October 2017, Mr Palmer filed a notice of appeal against the judgment which refused leave to adduce further evidence. The corporate defendants also filed their own appeal against that judgment.

167. On 24 November 2017, judgment was given in the Supreme Court of Western Australia in favour of Mineralogy which I have discussed at [111]. With the consent of the plaintiffs, Mr Palmer, the joint venturers and Mineralogy were given leave to re-open to adduce evidence of that judgment and directions were given for further submissions and a final hearing date on 6 March 2018, which proved to be the final day of hearing. By then the appeals against the judgment of 29 September 2017 had been dismissed by consent, with the appellants ordered to pay the costs.

“Seeks to identify Mr Palmer’s ties to Queensland and Australia. The affidavit is intended to highlight achievements in the Australian Federal Parliament and exhibits his book which illustrates those achievements.”

171. The primary judge said this about Mr Palmer’s first affidavit:

“A more inauspicious basis upon which to bring an application for further evidence could hardly be imagined. The notion that it might be necessary to let evidence in, exhibiting a book bearing the description that has been put before me, is hard to take seriously. I reject the application.”

172. Mr Palmer described his second proposed affidavit as one which was relevant because it was evidence of what had occurred during his cross-examination. It did not relate to any of the questions which were ultimately to be determined in the application for freezing orders. His Honour noted a submission by the solicitor for the other defendants that this affidavit of Mr Palmer also contained evidence described as follows:

“The affidavit of Mr Clive Palmer filed on 25th of September 2017 seeks to highlight and clarify certain evidence that was brought up during the last hearing. It further evidences this with certain evidence such as PwC’s involvement in pre-administration advices and action that was sought to be taken.

The affidavit of Clive Palmer further provides evidence in relation to events during the administration and the frustrations that had occurred in attempting to maintain the operation of the refinery. The reason that this material has been sought to be submitted was a result of the evidence which was led during the hearing and the Palmer parties saw fit that the entire set of facts should be presented rather than piecemeal as may have been portrayed and led under cross-examination.”

173. The primary judge said that this submission did not persuade him that there was any particular further evidence from Mr Palmer which should be admitted. Mr Palmer now says that, although his and the other affidavits containing the further evidence were not read on the application to re-open, the judge should have considered that evidence in full rather than relying upon summaries of their contents which were given by Mr Palmer and the solicitor who was making the application. The written submissions for Mr Palmer claim that in this context, as a self-represented litigant, Mr Palmer should have been given some leeway and assistance from the Court in the identification of any issues of dispute. That same submission was made in written submissions to the primary judge on the application for leave to re-open. His Honour rejected the argument in terms with which I agree:¹⁴⁴

“I should also say that some aspects of what Mr Palmer has placed in his written submissions before me ask me to treat him as though he was an ordinary litigant in person outnumbered by senior counsel, well resourced, on the other side of the record. I cannot accept the proposition. Material adduced by Mr Palmer before me reveals that, by his own description, he is a man of considerable wealth. Companies that he owns have been able to retain senior counsel and solicitors. If he chooses to represent himself, that is because it suits his purposes to represent himself to give himself a personal voice in these proceedings. It is appropriate to give litigants in person some differential treatment in Courts to ensure that the proceedings are fair. Even if a litigant with resources chooses not to be represented, I think it is still appropriate to give such a litigant some leeway, and I have sought on occasion to do that with Mr Palmer, given an inevitable lack of familiarity with court processes that a litigant in person has. But I am not prepared to accept the notion that in this litigation I should assess Mr Palmer’s position as though he were unrepresented with no access to legal advice.”

174. Although it is asserted in Mr Palmer’s written submissions in this Court that the proposed further evidence would have affected the outcome of the application for freezing orders, the submissions do not attempt to make good that assertion by reference to the detail of the evidence and the relevant parts of the Judgment.

175. For these reasons Ground 2(k) must be rejected.

Alleged bias

176. Ground 2(m) is that the primary judge erred in not recusing himself before making the freezing orders.

177. As already noted, Mr Palmer’s application for recusal was dismissed on 17 October 2017. Mr Palmer appealed against that decision but, on 22 February 2018, by consent, the appeal was dismissed and he was ordered to pay the respondents’ costs of it.

178. Mr Palmer’s present arguments about recusal go well beyond matters which he agitated on 17 October 2017. But to the extent that he still relies on those matters, some discussion of them is necessary.

179. In the Recusal Judgment, the primary judge identified three groups of factual circumstances upon which Mr Palmer then relied, the first of which involved something that had happened when Mr Palmer was being cross-examined by counsel for the plaintiffs on 14 September 2017. The primary judge had interrupted the cross-examination saying that there was something which he wished to raise with those at the bar table but in the absence of Mr Palmer. Mr Palmer then left the court room before his Honour said that he had the impression that Mr Palmer’s testimony was to the effect that the joint venturers were saying to the administrators/liquidators that the joint venturers were seeking an accounting of what Queensland Nickel had spent so that they might reimburse the company. The judge said that this evidence seemed to be inconsistent with the contentions by the joint venturers and Queensland Nickel Sales in an earlier proceeding, in which those three companies had sought leave to proceed against Queensland Nickel for declarations that it had no right or interest in the joint venture property and that it was obliged to transfer it to Queensland Nickel Sales. In that earlier proceeding, those companies also sought a further declaration that call notices issued by Queensland Nickel to the joint venturers were not validly issued in accordance with the Joint Venture Agreement. In that matter, leave to proceed was refused by a judgment delivered on 29 September 2016 (the “2016 Judgment”).¹⁴⁵

180. What was concerning the judge was an apparent tension between Mr Palmer’s testimony and the position of those three companies in that earlier proceeding. The judge said that he did not wish to ventilate this concern in the presence of Mr Palmer whilst he was still under cross-examination. He said he would leave it to those at the bar table to raise it as they saw fit. Mr Palmer then returned to the witness box.

181. After some further evidence from him, other evidence was interposed and Mr Palmer’s cross-examination resumed on the following morning. Before that occurred, again in the absence of Mr Palmer, the judge said that he proposed that at the end of Mr Palmer’s cross-examination, he would give Mr Palmer an opportunity to read the relevant passages of the transcript of the previous day so that he could, in effect, re-examine himself on the matter which the judge had raised. Counsel for some of the corporate defendants asked to re-examine Mr Palmer on that matter, to which the judge agreed. Mr Palmer returned and the judge then informed him of what had occurred.

“Since at least 2009, the relationship between the Joint Venturers inter se and between them and Queensland Nickel, has not been an arm’s length relationship.”

Mr Palmer does not explain how that statement could have been controversial. As the judge explained in each judgment, from about 2009, entities controlled by Mr Palmer held a 100 per cent interest in the joint venturers, which in turn owned Queensland Nickel.

Conclusion and orders

202. No ground in these appeals is established and there was no error affecting the exercise of the discretion to make these orders.

203. I would order as follows:In CA 6561/18, the appeal be dismissed with costs; andIn CA 6047/18, the application filed on 24 July 2018 be dismissed with costs and the appeal be dismissed with costs.

Footnotes

1. Parbery & Ors v QNI Metals Pty Ltd & Ors [2018] QSC 107. ↩

2. Judgment at [3]. ↩

3. Who has since resigned. ↩

4. And/or ancillary order as defined in r 260B. ↩

5. Judgment at [101]. ↩

6. Judgment at [108]. ↩

7. Judgment at [113]. ↩

8. Judgment at [119]. ↩

9. Judgment at [123]. ↩

10. Judgment at [125]. ↩

11. Judgment at [127]. ↩

12. Judgment at [135]. ↩

13. Judgment at [136]. ↩

14. Judgment at [134]. ↩

15. Judgment at [106]. ↩