Australian Securities Commission v MacLeod, R.J. & Ors [1995] FCA 458

IN THE FEDERAL COURT OF AUSTRALIA )No. QG 3011 of 1992 QUEENSLAND DISTRICT REGISTRY ) GENERAL DIVISION ) IN THE MATTER OF ROBERT JAMES MACLEOD AND OTHERS AUSTRALIAN SECURITIES COMMISSION Applicant ROBERT JAMES MACLEOD First Respondent TRAINEX PTY. LTD. A.C.N. 001 506 332 Second Respondent STARLIGHT FILM STUDIOS LTD. A.C.N. 051 750 442 Third Respondent STARLIGHT PICTURES PTY. LTD. A.C.N. 055 168 128 Fourth Respondent STAR PARTNERS PTY. LTD. A.C.N. 055 168 155 Fifth Respondent MINUTES OF ORDERS JUDGE MAKING ORDER: Drummond J DATE OF ORDER: 30 June, 1995 WHERE MADE: Brisbane THE COURT ORDERS THAT: 1. The applicant's application for costs be granted in terms of paragraph 1 of the notice of motion filed 29 June, 1995, save that the costs in question be paid by the receivers out of the assets beneficially owned by the first respondent, if any. 2. The respondents pay the applicant's costs of and incidental to the notice of motion. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA) No. QG 3011 of 1992 QUEENSLAND DISTRICT REGISTRY ) GENERAL DIVISION ) IN THE MATTER OF ROBERT JAMES MACLEOD AND OTHERS AUSTRALIAN SECURITIES COMMISSION Applicant ROBERT JAMES MACLEOD First Respondent TRAINEX PTY. LTD. A.C.N. 001 506 332 Second Respondent STARLIGHT FILM STUDIOS LTD. A.C.N. 051 750 442 Third Respondent STARLIGHT PICTURES PTY. LTD. A.C.N. 055 168 128 Fourth Respondent STAR PARTNERS PTY. LTD. A.C.N. 055 168 155 Fifth Respondent Coram: Drummond J Date: 30 June, 1995 Place: Brisbane REASONS FOR JUDGMENT This is a notice of motion by the Australian Securities Commission ("the Commission") for an order that certain costs the subject of orders made by myself, the Full Court and the High Court, when taxed, be paid by the receivers out of the assets of the respondents. The costs in question are the costs which I, in the first instance, ordered the first respondent, Mr. MacLeod, to pay to the Commission in respect of the contempt proceedings the Commission successfully prosecuted against him. The other orders are orders made in favour of the Commission in the Full Court and in the High Court, in respect of the costs of Mr. MacLeod's unsuccessful appeal and application for leave to appeal against my orders. I have no difficulty in the circumstances of this case, in which Mr. MacLeod has long since decamped, in making the order sought but limiting it to an order that the costs the subject of the Commission's application be paid by the receivers out of the assets, if any, held by them which are beneficially owned by the first respondent. My difficulty in making the order in the wider terms sought by the Commission flows from the fact that what appears in all probability to be the whole of the property of which Mr. MacLeod is legal, as opposed to beneficial, owner, which is in the hands of the receivers, was the subject of an order by me on 17 November. I then declared that the property listed in schedule 4 to my order of 17 November was property wholly improperly purchased by Mr. MacLeod with investor funds, i.e., property of which Mr. MacLeod is not beneficial owner. I have difficulty in finding a basis upon which it would be proper for me to give the Commission its costs of the contempt proceedings from such funds not being funds beneficially owned by Mr. MacLeod. It is true that the Commission, by its activities, has been instrumental in ensuring that a fund was preserved for the benefit of the investors: I have no difficulty in seeing that it has a just claim for an order that the costs of all its activities which resulted in the preservation of that fund should be paid out of the fund ahead of any distribution to investors. But, as I understand things, the contempt proceedings, although intimately related to the litigation instigated by the Commission which resulted in the accumulation of the fund, cannot be said to have played any part in augmenting or preserving that fund. It is for that reason that I am not prepared to make an order that the Commission's costs of the perfectly proper contempt proceedings that it instigated should be paid out of any property, other than property identifiable as that of which Mr. MacLeod is the beneficial owner. There will be an order in terms of paragraph 1 but limited to an order that the costs in question be paid by the receivers out of the assets beneficially owned by the first