Australian Securities Commission v Samson, Gary [1997] FCA 739

FEDERAL COURT OF AUSTRALIA

CORPORATIONS LAW - whether warrant should issue under s 530C of the law - whether conditions should be attached. Corporations Law: s 530C Cvitanovic v Kenna and Brown Pty Limited (1995) 18 ACSR 387 Morton v Robins (1996) 14 ACLC 1197 AUSTRALIAN SECURITIES COMMISSION v GARY SAMSON No VG 3169 of 1997 GOLDBERG J MELBOURNE 12 JUNE 1997

IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) No VG 3169 of 1997 ) GENERAL DIVISION )

BETWEEN: AUSTRALIAN SECURITIES COMMISSION

Applicant

AND: GARY SAMSON

Respondent

JUDGE: GOLDBERG J PLACE: MELBOURNE DATE: 12 JUNE 1997

REASONS FOR JUDGMENT HIS HONOUR: The application before the Court is that pursuant to s 530C of the Corporations Law a warrant be issued authorising Malcolm Kimball Howell, an officer of the Australian Securities Commission, with such assistance as is reasonably necessary, to search for and seize any books of Idem Australia Proprietary Limited in liquidation ("the company") in the possession of the respondent. The affidavits of Malcolm Kimball Howell, Gregory Pollard Meredith and Justin McCarthy disclose that on 12 February 1997 an order for the winding up of the company was made by Merkel J and that Mr Anthony George Hodgson was appointed official liquidator of the company. On the next day Mr Gary Samson, the respondent, telephoned the offices of Ferrier Hodgson, the firm of which the liquidator is a principal, spoke to Mr McCarthy and said he would be helping the directors of the company. Mr McCarthy asked Mr Samson to deliver the books and records of the company to the liquidator. Mr Samson said he would do so and a meeting was arranged for 25 February 1997. On 18 February 1997 Mr McCarthy spoke to Mr Samson and asked him when he would receive the books and records of the company. Mr Samson told him he would get back to him the next day. Between 13 and 21 February 1997 Mr McCarthy had placed a number of telephone calls to Balnaves, Cooper and Company, accountants, whose office was the registered office of the company. He was told that Mr Balnaves, a principal who is the accountant for the company, was unavailable. On 18 February 1997 Mr McCarthy wrote to Mr Samson and asked him to bring the company's books and records to the meeting on 25 February 1997. On 24 February 1997 Mr Samson told Mr McCarthy he could not come the next day and the meeting was deferred to 26 February 1997. Mr Samson said he would have finalised a report as to affairs and he would bring the books to that meeting. On 26 February 1997 Mr Samson attended the meeting with Mr McCarthy and said that he had sent the books and records of the company to Mr Balnaves for him to prepare the report as to the company's affairs. That statement was in sharp contrast to, and inconsistent with, what he had told Mr McCarthy on 24 February 1997. On 3 March 1997 Mr McCarthy sent a notice to Mr Balnaves to deliver up the books and records of the company to the liquidator. There was no response to that notice. Mr Howell was notified of these matters in his capacity as an officer of the Australian Securities Commission and he was informed of what had happened to date by Mr McCarthy on 27 March 1997 and on that date he telephoned Mr Balnaves. Mr Balnaves told Mr McCarthy that he had never been employed to do the report as to affairs, that all his dealings were with Mr Samson and he told Mr Howell that Mr Samson collected the records of the company approximately four weeks earlier, that is around 28 February. Mr Balnaves said that Mr Samson had told him that he had taken the books to Melbourne. On 18 and 21 April 1997 Mr Howell tried to contact Mr Samson without success. He finally spoke to him by telephone on 21 April 1997 when Mr Samson told him that he recalled collecting some records. Mr Howell told him to deliver the books and records by 25 April 1997 or else consideration would be given to a prosecution. On 22 April 1997 Mr Howell sent a letter by facsimile to Mr Samson requiring the books to be delivered to the liquidator by 25 April 1997. On 24 April 1997, the day before the books were required to be delivered, Ms Stork, a solicitor who was acting for Mr Samson in relation to the ASC requests, telephoned Mr Howell and said that her client had had trouble sorting out the records. Mr Howell then gave Mr Samson an informal extension to 28 April 1997 for the delivery up of the books and records and said if they were not then delivered, the Commission would be seeking a warrant. Ms Stork told Mr Howell on 24 April 1997 that she would speak to her client, but since then there has been no response. The final communication was on 29 April 1997 when Mr Samson telephoned Mr McCarthy and said he would see what books he had and he would call back in relation to fixing a date for the delivery up of the books to Mr McCarthy. Mr Samson said he would call back on 1 May 1997. He did not do so and has not called Mr McCarthy since that date. In my opinion, it appears from the material before me that the respondent has in his possession, power, custody or control books and records of the company and it would appear that he is concealing them. It would also appear that he has probably removed them from one place to another, but certainly the sequence of events between 13 February and 29 April 1997 as deposed to in the affidavits, the relevant facts of which I have shortly summarised, leads me to be satisfied that Mr Samson has concealed or removed the property of the company with the result that the taking of the property into the custody or control of the liquidator has been prevented and delayed and certainly will be prevented or delayed. It seems to me that on the definition of "property" in s 9 of the Corporations Law, the books and records of the company constitute property of the company. The evidence discloses that such property has been concealed and removed by Mr Samson and that the ability of the liquidator to obtain the custody and control of that property has been prevented and delayed by Mr Samson's actions for over three months. In any event I am satisfied on the evidence that Mr Samson has concealed or removed books of the company. In those circumstances, I am satisfied that the jurisdiction to issue the warrant under s 530C of the Corporations Law has been established and in the circumstances before me I am satisfied that this is an appropriate case where such a warrant should issue. I have given consideration to the observations of Young J in Cvitanovic v Kenna and Brown Pty Limited (1995) 18 ACSR 387 where his Honour (page 391-2) specified a number of conditions which he attached to the issue and execution of such a warrant. I have also given consideration to the observations of Northrop J in Morton v Robins (1996) 14 ACLC 1197 where his Honour declined to attach conditions to the issue and execution of a warrant issued under s 530. Having regard to the context and content of s 530C, notwithstanding the observations of Young J, I consider it appropriate to follow the procedure adopted in this Court by Northrop J and other judges of the Court as to the form of warrant which should be issued. I am not satisfied at the present time that the conditions referred to by Young J should be inserted in the form of the warrant or required as a condition of the execution of the warrant. I am therefore satisfied that the Court should issue a warrant in the following terms: Whereas, on the application of the Australian Securities Commission the Court is satisfied that the Respondent, Gary Samson, has concealed or removed property of Idem Australia Pty Ltd (In Liquidation) ACN 054740359 ("the company") with the result that the taking of the property into the custody or control of the liquidator has been and will be prevented or delayed and has concealed or removed the books and records of the company. You Are Hereby Authorised, with such assistance as is reasonably necessary from the staff of the Australian Securities Commission and the Australian Federal Police, to search for and to seize all property and books of the company, coming within the definition of those words in section 9 of the Corporations law, which are in the possession of the Respondent, Gary Samson and to hold possession of such property and books of the company seized under this warrant until otherwise directed by order of this Court. And You Are Authorised in order to seize such property and books of the company under this warrant to break open a building, room or receptacle where the property is or the books are or where you reasonably believe the property or books of the company to be located.". Orders will be made accordingly. I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg