PIER (WA) PTY LTD AS TRUSTEE FOR ISANDI TRUST -v- JEAN MAURICE PTY LTD [No 2] [2018] WASC 23 (25 January 2018)

the defendants, other than the fourth defendant, transfer and pay AUD$1.6 million to an interestbearing trust account of the solicitors for the plaintiff to be held with an Australian bank in the name of that firm pending and to be dealt with in accordance with the further order of this court or, otherwise, in accordance with a joint direction, in writing, of the solicitors for the plaintiff and the solicitors for the defendants, or, alternatively, the defendants, other than the fourth defendant, deliver up to the custody of the Principal Registrar of the Supreme Court the 29 gold lingots referred to in the subject of par 13 and par 14 of the affidavit of Mr Durolek, sworn 20 February 2017, by the same date, that was 26 September 2017, provided that this order does not give the plaintiff a proprietary interest by way of security or otherwise in the said sum.

3 There were further orders of 7 September 2017 in terms of mediation and matters of a like procedural kind.

4 The 7 September orders, in terms of a payment of money into court or the delivering up of gold, have not, as I have said, been complied with.

5 The last hearing was effectively a long appointment on 7 September, after which I gave my ex tempore reasons for what, in the circumstances, I considered were extreme, but appropriate orders requiring that a large amount of money to be either paid over into an account by agreement or paid into the solicitors for the plaintiff's account.

6 Alternatively, if such money could not be paid, then 29 the gold lingots themselves, were to be delivered over to court.

7 Now, it is apparent that those orders were not complied with.

8 I do not need to repeat, again, what is the unsatisfactory, extraordinary and unprecedented circumstances in which my orders came to be made on 7 September 2017.

9 The court had been acting, in effect, along with the plaintiffs for a period of time on a false assumption that moneys which had been applied, out of the country, to purchase 29 gold lingots, held in the custody of a French bank, and which gold had been, through the provision of certificate to the Principal Registrar, secured to abide, in effect, the outcome of this action, where I granted my limited freezing orders last year.

10 In fact, it appears that the court and, indeed, the plaintiffs had been seriously misled in terms of a position about the certificate of a bank as a security over gold. That arose from a discovery that, in fact, a forged certificate, as it appears, had been provided. That was discovered, rendering, in effect, all assumptions which had been made by way of holding the certificates over that gold and thereby security, were completely wrong, changing the situation dramatically.

11 Worse than a lack of security, however, was the calculated nature of a deceit perpetrated on the court - it appeared from the materials which were submitted prior to the time that the myth of security was exploded.

12 That was the basis which, together with certain other concerning features I discussed in those ex tempore reasons, led to that extreme order.

13 I was not easily persuaded on 7 September 2017 that it was an appropriate order. But, in the end, by reference to case authority, I thought such order appropriate. That position has not been the subject of any disturbance.

14 My 7 September 2017 order allowed almost three weeks for it to be complied with. I specifically set a compliance time of 26 September 2017 - with an eye to today's special appointment, two days thereafter, at 28 September, so I could monitor and review the resulting position in terms of compliance or otherwise.

15 An affidavit of Emily Grace Pendlebury, sworn yesterday, indicates that HopgoodGanim Lawyers, the solicitors of record for the plaintiff, have not received AUD$1.6 million in funds within that timeline or, indeed, at all at the time Ms Pendlebury swore her affidavit. Enquiries with the court, in terms of the Principal Registrar's possible receipt of gold lingots, have not indicated receipt. My independent enquiries made through my Associate confirm that to be so.

16 I am sure if such an amount of gold had arrived by 4.00 pm on Tuesday afternoon that I would have been the first to know. So I can work safely then on the factual assumption that there has been complete noncompliance with those orders of 7 September 2017.

17 The question then is what is the appropriate course for the court to take?

18 This is an exceptional case in terms of there being no explanation at all provided by affidavit, in terms of why my orders have not been met. Nothing at all has been provided on behalf of the defendants, who are locally represented, to indicate an inability to comply, or by some other logistical reason inhibiting their compliance.

19 Nothing has been put before the court by the defendants. Yet I am thoroughly satisfied that the defendants are all cognisant of my 7 September 2017 orders and have been since they were made.

20 The defendants were represented by Mr O'Brien of Patrick Legal on 7 September 2017. Today they are represented by Mr Smith of that firm. It is quite exceptional in circumstances where solicitors of record act for the defendants that there should be no explanation at all proffered for what is, on the face of it, a contumelious default in terms of noncompliance with my orders. Nor is there any attempt to explain why they could not be complied with.

21 Today's question is what is the appropriate course from there. I am satisfied, by reference to the criteria as articulated by the Court of Appeal, most recently in Firmware Technologies Inc v Asia Platinum Group Ltd [2016] WASCA 179, that the five criteria that coram uniformly identified between [44] and [48] of their reasons in that decision are met in terms of a basis of support for a springing order to issue immediately.

22 The facts of Firmware concerned a failure to provide witness statements in accord with the timeline. The court offered observations about why these orders are extreme. They need to be crafted with care so that they can be met. There should be no vacuous criteria over compliance. The court ought to consider whether, in the circumstances of the case, the time allowed for compliance and the question of an extension of time for compliance, in all the circumstances, might be a less extreme remedy or for an indulgence necessary in order to meet the needs of the justice.

23 Each case, of course, is different. Each has to be given its own unique evaluation. The present circumstances were largely canvassed by me as at 7 September and led to extreme orders which I then made.

24 The facts concerning a forged certificate for 29 gold ingots do not need to be canvassed again. This is a quite unusual and extraordinary case where I had made, initially, my first tranche of freezing orders last year. Then, as time has advanced, I have varied them by way of various tightening and ancillary orders issued from time to time - in the face of an increasingly disturbing series of events which have unfolded, all indicating to me that the court's prior freezing orders were either ineffectual or were being completely ignored by the defendants.

25 Orders that I previously made about the third and fourth defendants surrendering passports, not leaving the country, swearing affidavits giving full and frank disclosure about the full extent of the parties' assets were made but have proven not to be complied with.

26 This is all a matter of great concern. I am under the distinct impression the court is being treated poorly by all defendants who continue to ignore orders without explanation, notwithstanding that they have engaged solicitors of record.

27 Even today Ms Pendlebury's affidavit indicates from the results of subpoenas issued, returnable on 7 September, to financial institutions such as BankWest and the National Australia Bank, show disturbing features. The subpoenas have revealed an existence of a term deposit under EGP4, the National Australia Bank that was not previously disclosed, in the amount of $29,197; and the existence of an account with BankWest, which has been in substantial credit in the name of the fourth defendant, Mrs Durolek. The components of a statement for that account, commencing with EGP3 on page 10 of Ms Pendlebury's affidavit, show payments from April 2017 to another ANZ account currently undisclosed. Further, debits to that account show transfers of funds to an HSBC account by way of one illustration only, 6 June 2017, page 13 of Ms Pendlebury's affidavit. 'Bel' (which I am satisfied is a reference to the fourth defendant, Belinda Durolek) a debit against the account indicating a transfer of funds to an HSBC account in the amount of $3,000.

28 Regular funds transfers on 13 June 2017 and thereafter can be seen tracking through the details of that same account. No explanation at all is provided for why that account of the fourth defendant has only just been learned of, in terms of its existence. That is in circumstances where I have previously issued orders requiring the defendants to fully disclose their assets, including bank accounts. Mr Durolek had gone on oath as to that, but had not, for himself and his wife, disclosed that very account - when plainly it is not an account that could have been forgotten.

29 It was not an inactive account. The HSB account I am referring to is the subject of regular transfers out of that BankWest account. That is disturbing yet again.

30 But these events are only one more factor to add to a disturbing number of prior instances where orders the court has previously made have, effectively, been ignored by the defendants. In the circumstances, a springing order is fully appropriate. The criteria as identified in Firmware I am satisfied are firmly met here.

31 Mr Smith advocated that any springing order should allow 14 days for compliance rather than the seven days I originally had in mind. Any order should be selfexecuting. Today is 28 September, being precisely 21 days since my orders of 7 September 2017 were made and which required compliance by Tuesday, 26 September 2017.

32 Today, I am prepared to extend time for the defendants' compliance under par 1 of my orders of 7 September 2017. I allow a further extension of time until 4.00 pm Western Standard Time on Thursday, 5 October 2017. That is effectively seven days from today. It will effectively mean that from the time that order was made on the 7 September, there has been almost a month for compliance with par 1 of my orders of 7 September. That is in circumstances where, I repeat, there is a deafening silence from the defendants in terms of why there has been no compliance.

33 There is no affidavit produced by the defendants today, notwithstanding that I am thoroughly convinced they know full well of those orders 7 September 2017 as made and which were required to be complied with by Tuesday of this week.

34 In the circumstances, 'enough is enough'. A further seven days time to comply might be viewed, effectively, as a generous extension of time - when I first contemplated a self-executing order instanter of today.

35 But I do allow a further period of seven days for compliance with my 7 September 2017 orders.

36 To be clear, the springing orders are selfexecuting, striking out the defences and counterclaims of all defendants in the event of noncompliance by them. There will follow as well a selfexecuting judgment in favour of the plaintiff against the defendants, effectively, for damages to be assessed - in the event that the order springs, by reason of the striking out of the defences and counterclaims by the operation of that order. That is the significant order of business of the day.