Yara Pilbara Fertilisers Pty Ltd [formerly known as Burrup Fertilisers Pty Ltd] v Oswal

Yara Pilbara Fertilisers Pty Ltd [formerly known as Burrup Fertilisers Pty Ltd] v Oswal - [2017] FCA 1471 - FCA 2017 case summary — Zoe

Background 2 These proceedings were commenced on 10 March 2011 by the filing of an originating process and statement of claim filed on behalf Burrup Fertilisers Pty Ltd (ACN 095 441 151) (as it was then known) by its then receivers, Ian Menzies Carson, David Lawrence McEvoy and Simon Guy Theobald (collectively the Receivers). The applicant is now known as Yara Pilbara Fertilisers Pty Ltd (YPF). 3 YPF is the owner and operator of an ammonia nitrate plant located on the Burrup Peninsula in the north west of Western Australia and constructed between approximately mid-2003 and mid-2006 (Plant). 4 YPF is the wholly owned subsidiary of the sixth cross respondent by counterclaim, Yara Pilbara Holdings Pty Ltd (formerly Burrup Holdings Limited (ACN 097 138 353) (YPH). At the time when the proceedings were commenced, YPH was owned as follows: (a) Yara Australia Pty Ltd (ACN 076 301 221) owned 35% of the issued shares; (b) Mr Oswal, owned 30% of the issued shares; and (c) The second defendant, Ms Oswal owned 35% of the issued shares. 5 On or about 16 December 2010, Australia and New Zealand Banking Group Limited (ACN 005 357 522) (ANZ) appointed the Receivers as: the receivers and managers of Mr Oswal's shares in YPH; and the receivers and managers of certain of Ms Oswal's shares in YPH. 6 On or about 17 December 2010, ANZ appointed the Receivers as the receivers and managers of YPF. Mr Oswal was the Managing Director of YPF as at that date. 7 At the time the proceedings were commenced, the respondents to the action were Ms Oswal, Mr Oswal and Comical Ali Militant Vegetarian Pty Ltd (ACN 129 299 172). By a further amended application dated 3 April 2012, YPF joined Oswal Industrial Pty Ltd (ACN 121 121 659) as a party to the proceedings. 8 YPF sought orders against Mr Oswal for the payment of statutory or equitable compensation for breach duties owed by him to YPF; declarations against each of Ms Oswal, Comical Ali and Oswal Industrial that they were knowingly involved in Mr Oswal's contraventions of the Corporations Act 2001 (Cth); and orders that Ms Oswal and/or Comical Ali and/or Oswal Industrial pay compensation to YPF. 9 By a defence and counterclaim filed on behalf of Mr Oswal on 30 June 2011, Mr Oswal: denied that he had acted in breach of his duties as director; denied YPF's claim for compensation and further alleged that the Receivers had not been validly appointed to YPF. Mr Oswal also made counterclaims to recover: unpaid salary entitlements; benefits conferred by him on YPF in connection with an interest rate swap agreement between Mr Oswal and ANZ; and approximately $491,000,000 of cost overruns paid by him for the benefit of YPF during the construction of the Plant. ANZ and its related party, ANZ Fiduciary Services Pty Ltd were joined to the proceedings by reason of Mr Oswal's defence counterclaims. 10 By a defence dated 17 August 2011 filed on behalf of Ms Oswal and Comical Ali, they each denied the claims made against them. 11 By a defence dated 27 April 2012 Oswal Industrial denied the claims made against it.

[4]

The Undertaking 12 On 14 June 2013, I ordered that YPF search for documents that appeared to belong to Mr Oswal or his associated entities and to make those documents available to MPH to collect upon MPH giving an undertaking that it had obtained the permission of interested parties to take receipt of the documents and to keep safe any documents that were made available for collection pursuant to that Order (Delivery Order). On 22 August 2013 MPH gave an Undertaking to the Court in terms substantially the same as the Delivery Order. 13 MPH then took delivery of, or collected: three boxes of documents on or about 15 January 2014; and 713 boxes of documents on or about 31 January 2014 (Paramount Documents). 14 By reason of Mr O'Shannessy's: involvement in supervising the review of the Paramount Documents; examination of some of the Paramount Documents; and his review of an index of the Paramount Documents prepared by YPF or a person on its behalf, Mr O'Shannessy believes that the 713 boxes contain documents that belong to Paramount (WA) Limited and that those documents relate to the construction of the YPF's ammonia plant between about 2003 and 2006. 15 The Paramount Documents remain in the custody of an archives facility known as Integrated Records at the request of MPH and remain in the custody of Integrated Records. 16 The proceedings were: (a) transferred to the Supreme Court of Victoria pursuant to orders I made on 6 February 2015; and (b) dismissed by way of consent order made by Justice Dodds-Streeton on 22 September 2016. 17 MPH has no use for the Paramount Documents and would like to instruct Integrated Records to transfer the documents to Mr Oswal or act on his instruction to destroy the Paramount Documents if that is Mr Oswal's wish. 18 Paramount was deregistered on 30 October 2007. MPH wrote to each of the directors of Paramount as at the date of it being deregistered to enquire as to their interest in the Paramount Documents. Two of the directors of Paramount responded to that email by stating that, in effect, they had no objection to MPH being released from the Undertaking and the documents being destroyed. 19 Mr Oswal and Ms Oswal agree to MPH being released from the Undertaking. 20 The fourth respondent has indicated that it has no objection to MPH being released from the Undertaking and the documents being destroyed. 21 The ANZ parties, YPF and YPH have stated through their solicitors that they have no objection to MPH being released from the undertaking and are aware that Mr Oswal's present intention is to destroy the Paramount Documents.

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