SBA Music Pty Ltd v Hall

REASONS FOR JUDGMENT REVISED FROM TRANSCRIPT 1 On 6 August 2013, SBA Music Pty Ltd and SBA Music Solutions Pty Ltd (together SBA) commenced proceedings in this Court against Wayne Hall. In very general terms, SBA alleges that Mr Hall was a director or senior officer of SBA and that while in that position he breached his fiduciary duties by, amongst other things, diverting business opportunities to himself, rather than SBA. The relief sought by SBA includes damages and compensation. Evidence filed by SBA in the principal proceedings indicates that, if successful, SBA may be entitled to damages or compensation in the order of $3 million. 2 By interlocutory application dated 16 September 2014, SBA sought freezing orders and ancillary orders under Division 7.4 of the Federal Court Rules 2011 (Cth) (the Rules) against various persons and entities. The individuals against whom orders were sought included Mr Hall and his spouse, or former spouse, Ms Sylvie Comeau-Hall. The entities included various companies that appeared to be using business names or operating businesses that had previously been used or operated by Mr Hall. 3 As events transpired, on the eve of the hearing of the interlocutory application on 19 September 2014, Mr Hall presented a debtor's petition against himself, pursuant to s 55 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act). When the matter came on for hearing on 19 September 2014, the precise status of the petition was unclear. It was not known whether the Official Receiver had rejected or accepted Mr Hall's debtor's petition in accordance with s 55 of the Bankruptcy Act. It was accordingly unclear whether, at that point in time, Mr Hall had become bankrupt. 4 As a result of the late change in circumstances, SBA's applications against Mr Hall and Ms Comeau-Hall were adjourned by consent. Undertakings were given by Mr Hall. Likewise, the application against Soundmark Solutions Pty Ltd, a company whose director and sole shareholder is Mr Hall, was also adjourned. The applications against two other entities, Mosaic Media Pty Ltd and Habitat Digital Pty Ltd, were not pressed by SBA. The only application that was pressed on 19 September 2014 was the application against a company called Venue Music Systems Pty Ltd. There was no appearance for Venue Music Systems Pty Ltd at the hearing. There is acceptable evidence that Venue Music Systems Pty Ltd was served with SBA's interlocutory application and supporting evidence. 5 The evidence relied on by SBA in support of its application reveals that as at 15 September 2014, the director and sole shareholder of Venue Music Systems Pty Ltd was a gentleman named Neil Anthony Hawkesford. The basis of SBA's application for a freezing order against Venue Music Systems Pty Ltd appears to relate to its use or apparent use of the business name, MyStore Radio. 6 Part of SBA's case against Mr Hall in the principal proceedings relates to a business known as MyStore Radio. The business appears to have originally been operated by a company named MyStore Radio Pty Ltd. SBA apparently provided services to that company. The company, MyStore Radio Pty Ltd, subsequently got into financial difficulties. Administrators who were appointed by the company entered into negotiations in relation to the sale of its business, including the business name MyStore Radio. SBA alleges that Mr Hall, whilst he was an officer of SBA, directed that particular business opportunity to himself, rather than SBA. Exactly who ended up owning the MyStore Radio business name and business is unclear, though SBA alleges that Mr Hall, or persons or entities associated with him, ultimately owned and operated that business. 7 In support of its application for a freezing order against Venue Music Systems Pty Ltd, SBA relies on evidence which appears to suggest that Venue Music Systems Pty Ltd now owns, or at least uses, the business name MyStore Radio. It also relies on evidence that tends to indicate that Mr Hall has some involvement or connection with Venue Music Systems Pty Ltd. 8 The evidence relied on by SBA is largely documentary and comprises extracts from various databases, including the Australian Securities and Investment Commission's (ASIC) business name database and the Australian Business Number (ABN) database. That evidence reveals the following: