FEDERAL COURT OF AUSTRALIA Australian Motor Finance Limited (Receivers and Managers appointed) v Angeleri (No 4) [2011] FCA 285 Citation: Australian Motor Finance Limited (Receivers and Managers appointed) v Angeleri (No 4) [2011] FCA 285 Parties: AUSTRALIAN MOTOR FINANCE LIMITED (RECEIVERS AND MANAGERS APPOINTED) ACN 088 604 188 and AUSTRALIAN MOTOR FINANCE CORPORATE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) ACN 102 903 748 v DENIS ANGELERI, IAN RUSSELL BRINDLEY, MICHAEL O'BRIEN, BIORURAL PTY LTD ACN 096 395 569, AUS-ASIA AQUACULTURE LTD ACN 091 621 411, WATER RECYCLING AUSTRALIA PTY LTD ACN 081 379 464, CREDIT STARTERS PTY LTD ACN 075 212 975, DRIVETIME LEASING PTY LTD ACN 129 998 241, DRIVETIME AUTO & FINANCE (IP) HOLDINGS PTY LTD ACN 122 765 815, EUROQUEST CORPORATE PTY LTD ACN 007 126 856, STRUCTURED INVESTMENT CORPORATION PTY LTD ACN 078 897 855, V8 SUPER LOANS PTY LTD ACN 118 586 226, DRIVETIME AUTO & FINANCE (DANDENONG) PTY LTD ACN 122 222 922, AUSTRALIAN MOTOR FINANCE GROUP LIMITED ACN 121 257 412, MONEYPAC INVESTMENT CORPORATION PTY LIMITED ACN 054 279 828, AUSTRALIAN HOUSE AND LAND PTY LIMITED ACN 13 539 800 and MONEYPAC SECURITIES PTY LIMITED ACN 061 576 887 File number: VID 47 of 2009 Judge: TRACEY J Date of judgment: 28 March 2011 Legislation: Bankruptcy Act 1966 (Cth) Corporations Act 2001 (Cth) ss 601, 601AB, 601AD Cases cited: Australian Motor Finance Limited (Receivers and Managers appointed) v Angeleri (No 3) [2010] FCA 1431 cited Date of hearing: 28 March 2011 Place: Melbourne Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 15 Counsel for the First and Second Plaintiffs: Mr M Hoffman QC Solicitor for the First and Second Plaintiffs: Finlaysons Lawyers Third and Fifteenth Plaintiffs: No appearances IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 47 of 2009 BETWEEN: AUSTRALIAN MOTOR FINANCE LIMITED (RECEIVERS AND MANAGERS APPOINTED) ACN 088 604 188 First Plaintiff AUSTRALIAN MOTOR FINANCE CORPORATE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) ACN 102 903 748 Second Plaintiff AND: DENIS ANGELERI First Defendant IAN RUSSELL BRINDLEY Second Defendant MICHAEL O'BRIEN Third Defendant BIORURAL PTY LTD ACN 096 395 569 Fourth Defendant AUS-ASIA AQUACULTURE LTD ACN 091 621 411 Fifth Defendant WATER RECYCLING AUSTRALIA PTY LTD ACN 081 379 464 Sixth Defendant CREDIT STARTERS PTY LTD ACN 075 212 975 Seventh Defendant DRIVETIME LEASING PTY LTD ACN 129 998 241 Eighth Defendant DRIVETIME AUTO & FINANCE (IP) HOLDINGS PTY LTD ACN 122 765 815 Ninth Defendant EUROQUEST CORPORATE PTY LTD ACN 007 126 856 Tenth Defendant STRUCTURED INVESTMENT CORPORATION PTY LTD ACN 078 897 855 Eleventh Defendant V8 SUPER LOANS PTY LTD ACN 118 586 226 Twelfth Defendant DRIVETIME AUTO & FINANCE (DANDENONG) PTY LTD ACN 122 222 922 Thirteenth Defendant AUSTRALIAN MOTOR FINANCE GROUP LIMITED ACN 121 257 412 Fourteenth Defendant MONEYPAC INVESTMENT CORPORATION PTY LIMITED ACN 054 279 828 Fifteenth Defendant AUSTRALIAN HOUSE AND LAND PTY LIMITED ACN 13 539 800 Sixteenth Defendant MONEYPAC SECURITIES PTY LIMITED ACN 061 576 887 Seventeenth Defendant JUDGE: TRACEY J DATE OF ORDER: 28 MARCH 2011 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The sum of $52,626.54, paid into Court pursuant to the order made herein on 2 July 2010, plus interest accrued be paid forthwith to Mrs Lyn Maree O'Brien. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 47 of 2009 BETWEEN: AUSTRALIAN MOTOR FINANCE LIMITED (RECEIVERS AND MANAGERS APPOINTED) ACN 088 604 188 First Plaintiff AUSTRALIAN MOTOR FINANCE CORPORATE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) ACN 102 903 748 Second Plaintiff AND: DENIS ANGELERI First Defendant IAN RUSSELL BRINDLEY Second Defendant MICHAEL O'BRIEN Third Defendant BIORURAL PTY LTD ACN 096 395 569 Fourth Defendant AUS-ASIA AQUACULTURE LTD ACN 091 621 411 Fifth Defendant WATER RECYCLING AUSTRALIA PTY LTD ACN 081 379 464 Sixth Defendant CREDIT STARTERS PTY LTD ACN 075 212 975 Seventh Defendant DRIVETIME LEASING PTY LTD ACN 129 998 241 Eighth Defendant DRIVETIME AUTO & FINANCE (IP) HOLDINGS PTY LTD ACN 122 765 815 Ninth Defendant EUROQUEST CORPORATE PTY LTD ACN 007 126 856 Tenth Defendant STRUCTURED INVESTMENT CORPORATION PTY LTD ACN 078 897 855 Eleventh Defendant V8 SUPER LOANS PTY LTD ACN 118 586 226 Twelfth Defendant DRIVETIME AUTO & FINANCE (DANDENONG) PTY LTD ACN 122 222 922 Thirteenth Defendant AUSTRALIAN MOTOR FINANCE GROUP LIMITED ACN 121 257 412 Fourteenth Defendant MONEYPAC INVESTMENT CORPORATION PTY LIMITED ACN 054 279 828 Fifteenth Defendant AUSTRALIAN HOUSE AND LAND PTY LIMITED ACN 13 539 800 Sixteenth Defendant MONEYPAC SECURITIES PTY LIMITED ACN 061 576 887 Seventeenth Defendant JUDGE: TRACEY J DATE: 28 march 2011 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 In January 2009 serious irregularities were discovered in the financial affairs of the plaintiff companies. Shortly afterwards receivers and managers were appointed to both of them. On 24 January 2009 freezing orders were made against a number of defendants. These defendants included three directors and officers of the plaintiffs and a number of companies associated with them. By 13 February 2009 the freezing orders extended to the third defendant, Mr Michael O'Brien, who was a director and company secretary of the first plaintiff and an officer of the second plaintiff, and the 15th defendant, Moneypac Securities Pty Limited ("Moneypac"), a company controlled by Mr O'Brien. 2 The freezing orders were extended from time to time and they remain in force. 3 A full account of the circumstances in which the freezing orders came to be made is to be found in Australian Motor Finance Limited (Receivers and Managers appointed) v Angeleri (No 3) [2010] FCA 1431. It is not necessary, for present purposes, to restate them. 4 Moneypac was and is the trustee of the Michael O'Brien Family Trust ("the Family Trust") and was the registered proprietor of a property at 222 Hanley's Creek Road, Dungog ("the Dungog property"). The Maitland Mutual Building Society Limited ("the Building Society") held a mortgage over the property. Moneypac defaulted on making payments of principal and interest under the mortgage. The Building Society entered into possession on 25 June 2010. The mortgagor wished to sell the Dungog property but the freezing order prevented Moneypac from disposing of any assets. In order to permit the mortgagor's auction to proceed I ordered, on 2 July 2010, that the proceeds of the sale, after the payment of the Building Society's expenses relating to the sale and the payment of the monies owed to the Building Society by Moneypac had been made, be paid into Court and held in an interest bearing account pending further order of the Court. 5 The sale of the property took place on 18 September 2010. The sale price was $750,000. Settlement occurred on 29 October 2010 and the sum of $52,626.54 was subsequently paid into Court. 6 Apart from Mr O'Brien, the beneficiaries of the Family Trust are Mr O'Brien's father, Mr Thomas O'Brien, his wife, Mrs Lyn O'Brien and his three children, Emily, James and Elizabeth. 7 On 17 February 2011 Moneypac was deregistered pursuant to s 601AB of the Corporations Act 2001 (Cth) ("the Act"). Upon deregistration the property of Moneypac vested in the Australian Securities and Investments Commission ("ASIC"): see ss 601(1A) and 601AD(2) of the Act. 8 On 11 March 2011 Mrs Lyn O'Brien applied to the Court for a variation of the freezing order so that the monies paid into Court, following the sale of the Dungog property, plus interest accrued could be paid to her. 9 On 17 March 2011 Mr O'Brien lodged a debtor's petition under the Bankruptcy Act 1966 (Cth). There is no reason to consider that any of the monies in Court form part of Mr O'Brien's bankrupt estate. 10 The solicitors, acting for the plaintiffs, contacted each of the beneficiaries of the Family Trust. Each gave his or her consent to the making of "an order of the Court varying the Freezing Order to permit the entire proceeds of sale of the Dungog property currently held in the Court to be paid to Lyn Maree O'Brien but on the specific condition that in no circumstances will any of such monies be paid directly or indirectly to, or be available for the benefit of Michael O'Brien." 11 ASIC was made aware of these developments. By letter dated 25 March 2011, an officer of ASIC advised the plaintiffs' solicitors that the monies paid into Court had not vested in ASIC and that ASIC would abide any decision of the Court on Mrs O'Brien's application. 12 Mr O'Brien did not oppose the application. 13 The plaintiffs consented to the making of the orders sought by Mrs O'Brien subject to the condition to which the beneficiaries of the Family Trust had agreed. 14 Mrs O'Brien gave evidence that she was suffering severe financial hardship and was receiving no assistance from Mr O'Brien from whom she is estranged. The Dungog property had been the matrimonial home. She had been forced to find alternative accommodation once Moneypac ceased making periodic payments under the mortgage. Her children were dependent on her to varying degrees. 15 In the circumstances I consider it to be appropriate that the proceeds of the sale of the Dungog property should be made available to Mrs O'Brien. I note that she has agreed, in writing, to the conditions sought by the plaintiffs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. Associate: Dated: 28 March 2011