Discovery Africa Limited v Nichol [2014] FCA 482

FEDERAL COURT OF AUSTRALIA

Discovery Africa Limited v Nichol [2014] FCA 482 Citation: Discovery Africa Limited v Nichol [2014] FCA 482

Parties: DISCOVERY AFRICA LIMITED v KEVIN WILLIAM NICHOL, DANIE VAN DEN BERGH and SINDISE MINING LTD

File number: WAD 87 of 2014

Judge: GILMOUR J

Date of judgment: 16 April 2014

Catchwords: PRACTICE AND PROCEDURE – freezing orders – whether or not prima facie case sufficiently made out – whether or not the balance of convenience favours the making of orders – service out of the jurisdiction – proceedings claim damages with respect to contravention of the Corporations Act 2001 (Cth) which occurred in Australia

Legislation: Corporations Act 2001 (Cth) ss 181, 182 Federal Court Rules 2011 (Cth) rr 10.42, 10.43

Date of hearing: 16 April 2014

Place: Perth

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 25

Counsel for the Applicant: Mr J M Healy

Solicitor for the Applicant: Nova Legal

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 87 of 2014

BETWEEN: DISCOVERY AFRICA LIMITED

Applicant

AND: KEVIN WILLIAM NICHOL

First Respondent

DANIE VAN DEN BERGH

Second Respondent

SINDISE MINING LTD

Third Respondent

JUDGE: GILMOUR J DATE OF ORDER: 16 APRIL 2014 WHERE MADE: PERTH

THE COURT ORDERS THAT:

1. Pursuant to r 10.43 of the Federal Court Rules 2011 (Cth), leave be granted to serve the originating application and the respective freezing order: (a) on the first respondent in Singapore, in accordance with the Supreme Court of Judicature Act (Singapore) and Order 65 of the Rules of Court prescribed thereunder; and (b) on the second respondent in South Africa, in accordance with Rule 4 of the Uniform Rules of Court. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. PENAL NOTICE TO: KEVIN WILLIAM NICHOL IF YOU: (A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR (B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU TO ABSTAIN FROM DOING, YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT. 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. TO: Kevin William Nichol This is a ʹfreezing orderʹ made against you on 16 April 2014 by Justice Gilmour at a hearing without notice to you after the Court was given the undertakings set out in Part A to this order and after the Court read the affidavits listed in Part B to this order. THE COURT ORDERS: INTRODUCTION 1. The application for this order is made returnable immediately. 2. Subject to the next paragraph, this order has effect up to and including 4:00 pm on 1 May 2014 (the Return Date). On the Return Date at 2:15 pm there will be a further hearing in respect of this order before Justice Gilmour. 3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified. 4. In this order: (a) ʹapplicantʹ, if there is more than one applicant, includes all the applicants; (b) ʹyouʹ, where there is more than one of you, includes all of you and includes you if you are a corporation; (c) ʹthird partyʹ means a person other than you and the applicant; (d) ʹunencumbered valueʹ means value free of mortgages, charges, liens or other encumbrances. 5. In this order: (a) 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. (b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way. FREEZING OF ASSETS 6. For the purposes of this order: (a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia (Australian assets) up to the unencumbered value of AUD $300,000 (the Relevant Amount). (b) If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount. (c) If the unencumbered value of your Australian assets is less than the Relevant Amount: (i) You must not dispose of, deal with or diminish the value of any of your Australian assets and ex-Australian assets up to the unencumbered value of your Australian and ex-Australian assets of the Relevant Amount; and (ii) You may dispose of, deal with or diminish the value of any of your ex-Australian assets, so long as the unencumbered value of your Australian assets and ex-Australian assets still exceeds the Relevant Amount. 7. For the purposes of this order, (a) your assets include: (i) all your assets, whether or not they are in your name and whether they are solely or co‐owned; (ii) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions); and (iii) the following assets in particular: (A) your shares held in Australian Securities Exchange Limited listed company Discovery Africa Limited; and (B) any shares you hold in Australian Securities Exchange Limited listed company Argosy Minerals Limited. (b) the value of your assets is the value of the interest you have individually in your assets. PROVISION OF INFORMATION 8. Subject to paragraph 9, you must: (a) at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing of all your assets world-wide, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets; (b) within 15 working days after being served with this order, swear and serve on the applicant an affidavit setting out the above information. 9. For the purposes of this order: (a) This paragraph 9 applies if you are not a corporation and you wish to object that compliance with paragraph 8 on the ground that some or all of the information may tend to prove that you: (i) have committed an offence against or arising under an Australian law or a law of a foreign country; or (ii) are liable to a civil penalty. (b) This paragraph 9 also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively: (i) have committed an offence against or arising under an Australian law or a law of a foreign country; or (ii) are liable to a civil penalty. (c) You must, at or before the further hearing on the Return Date (or within such further time as the Court may allow), notify the applicant in writing that you or all the persons referred to in 9(b) wish to take such objection and identify the extent of the objection. (d) If you give such notice, you need comply with paragraph 8 only to the extent, if any, that it is possible to do so without disclosure of the material in respect of which the objection is taken, and deliver it to the Court in a sealed envelope. (e) If you give such notice, the Court may give directions as to the filing and service of affidavits setting out such matters as you or the persons referred to in 9(b) wish to place before the Court in support of the objection. EXCEPTIONS TO THIS ORDER 10. This order does not prohibit you from: (a) paying $20,000 of your reasonable legal expenses; (b) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and (c) in relation to matters not falling within 10(a) or 10(b), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation. 11. You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may order that the exceptions are varied accordingly. 12. For the purposes of this order: (a) This order will cease to have effect if you: (i) pay the sum of AUD $300,000 into Court; or (ii) pay that sum into a joint bank account in the name of your solicitor and the solicitor for the applicant as agreed in writing between them; or (iii) provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court. (b) Any such payment and any such security will not provide the applicant with any priority over your other creditors in the event of your insolvency. (c) If this order ceases to have effect pursuant 12(a), you must as soon as practicable file with the Court and serve on the applicant notice of that fact.