Scottish Pacific Business Finance Pty Ltd v Qaqour, in the matter of Penny World Pty Ltd

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

1. The second defendant file and serve an additional affidavit within 7 days of the date of this Order disclosing in accordance with order 7 of, and paragraph (4) of Annexure B to, the Orders made on 17 June 2022: (a) the recipient of the funds; (b) the account name of the recipient; (c) the BSB number of the recipient account; (d) the account number of the recipient account; and (e) the name of the person who effected the transfers, with respect to those withdrawals or transfers of funds from bank account number 10394007 which have been redacted from the list of transactions which is Annexure 'B' to the affidavit of the first defendant of nine paragraphs affirmed 23 June 2022 and accepted for filing at 9.25pm on 23 June 2022.
2. Costs of the application are reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

INTRODUCTION 1 On 17 June 2022, Yates J made an Order requiring the second defendant to serve an affidavit identifying the withdrawals or transfers of funds from bank account number 10394007 held by the second defendant during the relevant period from 29 March 2022 to 16 June 2022 and for each such withdrawal or transfer to identify: the recipient of the funds; the account name of the recipient; the BSB number of the recipient account; the account number of the recipient account; and the name of the person who effected the transfers. 2 The second defendant filed an affidavit affirmed by the first defendant (first defendant's open affidavit) which purported to provide such information with respect to some, but not all, of the transactions on the bank account during the relevant period. 3 The plaintiff seeks an order requiring the second defendant to file and serve an affidavit which addresses the transactions not included in the first defendant's open affidavit. The first defendant opposes the application on the basis that the order sought by the plaintiff (and the Order) requires him to disclose information over which he has a claim of privilege against self-incrimination. 4 For the reasons set out below, an order of the kind sought by the plaintiff should be made.

BACKGROUND 5 The first defendant is, and during the relevant period was, the sole member and director of the second defendant. 6 On 17 June 2022, Yates J made a series of orders in this proceeding, including the Order. His Honour's reasons for doing so are set out in Scottish Pacific Business Finance Pty Ltd v Qaqour in the matter of Penny World Pty Ltd (receivers and managers appointed) [2022] FCA 725 (Scottish Pacific (No 1)). The Order is in the following terms: 7. Pursuant to s 23 of the FCAA and r 7.33 FCR, an information eliciting order be made against the second defendant in the form set out in Annexure B hereto with respect to any transfers or withdrawal of funds since 29 March 2022 from a bank account in the name of the second defendant with BSB 062 145 and account number 10394007. 7 Annexure B to the 17 June 2022 orders includes: ANNEXURE B - INFORMATION ELICITING ORDER … TO: THE PROPER OFFICER, WIZLY PTY LTD ACN 168 729 182 … THE COURT ORDERS: INTRODUCTION … (3) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions. (4) Subject to paragraph (5), you must: (a) at or before 4.00 pm and 23 June 2022 (or within such further time as the Court may allow) to the best of your ability inform the plaintiff in writing of any withdrawal or transfers of funds from bank account number 10394007 in the name of Wizly Pty Ltd held with the Commonwealth Bank of Australia in the period from 29 March 2022 to 16 June 2022, stating the recipient of the funds, account name, BSB number and the account name of the person or entity who was the recipient of the funds and the person who effected the transfers. (b) by 4.00 pm on 23 June 2022, swear or affirm and serve on the plaintiff an affidavit setting out the above information. 8 On 23 June 2022, the second defendant filed the first defendant's open affidavit. In that affidavit, the first defendant: (1) annexed a list of transactions concerning the bank account during the relevant period, with certain transactions redacted. The basis of the redaction was a claim by the first defendant of privilege against self-incrimination; and (2) provided a table purporting to provide the information required by the Order, for the unredacted transactions. 9 The first defendant also made a second affidavit which was provided to the Court but not to the plaintiff. 10 On 28 June 2022, the solicitor for the first and second defendants, Ms Craven, made an affidavit in support of the first defendant's claim of privilege against self-incrimination. In that affidavit Ms Craven identified references in correspondence from the plaintiff and in the judgment of Yates J in Scottish Pacific (No 1) to the plaintiff's case including allegations of fraudulent conduct by the first defendant and companies controlled by him. Ms Craven also identified various sections of the Crimes Act 1900 (NSW) as provisions that may apply to the alleged conduct of the first defendant, in addition to the common law offence of conspiracy to defraud.

CONSIDERATION 11 The Order requires the second defendant, which is a body corporate, to give information in this proceeding. Thus, s 187 of the Evidence Act 1995 (Cth) applies: s 187(1)(a). The effect of s 187(2) of the Evidence Act is that the second defendant is not entitled to fail to comply with the requirement to give the information on the ground that giving that information might tend to incriminate the second defendant. 12 The second defendant, correctly, makes no claim of privilege against self-incrimination. However, the first defendant does. 13 In Meneses v Directed Electronics OE Pty Ltd [2019] FCAFC 190; (2019) FCR 638 at 663-664, the Full Court (Moshinsky, Wheelahan and Abraham JJ) stated at [95]-[96]: 95. The decision of Lindgren J in Microsoft v CX Computer was cited by Gordon J in Australian Securities and Investments Commission v Mining Projects Group Ltd (No 2) [2008] FCA 951, who formulated the following propositions at [7]: (1) a corporate defendant … may be required to provide documents and information which may tend to incriminate its officers: Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96 at 116; (2) a corporate defendant cannot invoke privilege on the grounds that an order or requirement to produce documents or information might tend to incriminate a natural person, such as a director: Microsoft Corporation v CX Computer Pty Ltd (2002) 116 FCR 372 at [32]-[33] (per Lindgren J) and ASIC v Mining Projects Group Ltd [2007] FCA 1620 at [5]; (3) a natural person cannot complain that a corporate defendant's compliance with an order or requirement to produce documents or information might tend to incriminate him or her: Microsoft Corporation v CX Computer Pty Ltd (2002) 116 FCR 372 at [32]-[33] (per Lindgren J) and ASIC v Mining Projects Group Ltd [2007] FCA 1620 at [5]; (4) the relevant enquiry is whether an order directed to the corporate defendant will require that a natural person tend to incriminate himself or herself: Microsoft Corporation v CX Computer Pty Ltd (2002) 116 FCR 372 at [32]-[33] (per Lindgren J) and ASIC v Mining Projects Group Ltd [2007] FCA 1620 at [5]…; (5) a corporate defendant cannot refuse to comply with a direction for the filing of evidence on the basis that its evidence may incriminate other natural person defendants or expose them to a penalty: Chief Executive Officer of Customs v Camile Trading Pty Ltd (2004) 58 ATR 163 at 170. However, a corporate defendant will not breach such a direction if it fails to file a statement or an affidavit from a witness where that witness claims privilege: ACCC v J McPhee & Son (Australia) Pty Ltd (1997) 77 FCR 217 at 220 and ACCC v Eurong Beach Resort Ltd [2005] FCA 1134 at [10], [12] and [13]. That is to say, compliance is not required if the only source of the information is the director defendants and they are entitled to remain silent (Emphasis added): ASIC v Mining Projects Group Ltd [2007] FCA 1620 at [5]. If the corporate defendant has other sources of information available from which it can comply with the direction, then it must do so. 96. We respectfully agree with the above propositions. … 14 Thus, it is necessary to consider whether the effect of the Order, which is addressed to the second defendant, is such that compliance is only possible if the first defendant is exposed to the risk of self-incrimination. This gives rise to two questions: first, is the first defendant the only source of the information; and secondly, if so, might the provision of the information expose the first defendant to such a risk. 15 The evidence concerning the first question establishes that: (1) the first defendant is, and during the relevant period was, the sole member and the sole director of the second defendant; (2) Ms Craven is instructed by the first defendant that during the relevant period: (a) the second defendant did not employ anyone; and (b) the first defendant was responsible for all transfers out of the bank account. 16 I am not satisfied, on the basis of this evidence, that no-one other than the first defendant could provide the requisite information on behalf of the second defendant. 17 Evidence that the first defendant is and was the sole member and director of the second defendant during the relevant period is insufficient as it does not exclude the possibility that the second defendant could comply with the Order by the filing and service of an affidavit from another person such as an employee of the second defendant; an agent of the second defendant (for example, an accountant or lawyer retained by the second defendant); a second director or an officer of the second defendant appointed by the first defendant (which he is capable of doing as the sole member of the second defendant); a bank officer; or a receiver appointed to the second defendant for this purpose (see Meneses at [153] and the authorities there cited). That the Order could be satisfied by an affidavit from someone other than the first defendant was expressly contemplated by paragraph (3) of Annexure B to the Order, which is set out at [7] above. 18 The evidence of Ms Craven that she is instructed by the first defendant that the second defendant did not employ anyone during the relevant period does not address the present position and in any event leaves open the possibility that persons other than employees may be in a position to provide the information sought. 19 It follows that I am not satisfied that the effect of the Order is to require the first defendant to make the requisite affidavit. It is thus unnecessary to consider whether the first defendant, had he been required to provide an affidavit, would have had a viable objection to making that affidavit based upon a claim of privilege against self-incrimination.

CONCLUSION 20 An order requiring the second defendant to provide the information required by the Order with respect to the redacted transactions should be made. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman.

SCHEDULE OF PARTIES NSD 444 of 2022 Defendants Fourth Defendant: OMAR JAMAL EDDINE Fifth Defendant: PENNY WORLD PTY LTD (RECEIVERS & MANAGERS APPOINTED) ACN 123 180 503 Sixth Defendant: CONSTRUCTIONS AU PTY LTD ACN 652 441 104 Seventh Defendant: ANDCONSTRUCTION PTY LTD ACN 638 960 899 Eighth Defendant: CCS136 CASTKEREAGH PTY LTD ACN 157 791 869