Supreme Court New South Wales Medium Neutral Citation: A&D Beaumont Pty Ltd atf A&D Beaumont Family Trust v Commonwealth Bank of Australia [2023] NSWSC 728 Hearing dates: 23, 27 June 2023 Date of orders: 27 June 2023 Decision date: 27 June 2023 Jurisdiction: Equity - Duty List Before: Meek J Decision: Order for preliminary discovery made. Order made restraining defendant from permitting funds to be withdrawn from bank account below value of $559,698.93 Catchwords: PRELIMINARY DISCOVERY — The plaintiff completed an application to place funds through a fund manager in a managed investment scheme — The application form included a mistaken reference to the BSB of the plaintiff's Commonwealth Bank of Australia account — Funds were placed — Later, the plaintiff sought to redeem the funds — The redemption form indicated that the funds should be paid to an account "previously advised" being the incorrect account — Subsequently, the plaintiff and the fund manager became aware the redeemed monies had been paid to an incorrect account belonging to a third party account holder with the Commonwealth Bank of Australia — The plaintiff, the fund manager and the fund manager's bank, corresponded with each other and also with the Commonwealth Bank of Australia to attempt to ascertain the identity of the incorrect third-party payee — The plaintiff was unable to readily obtain that information — The plaintiff sought preliminary discovery pursuant to r 5.2(2)(b) Uniform Civil Procedure Rules 2005 (NSW) (UCPR) — Order for preliminary discovery made CIVIL PROCEDURE — injunctive relief — Application for order pursuant to r 25.14(5) UCPR or inherent jurisdiction of the Court restraining defendant from permitting funds to be withdrawn from bank account in question unless after such withdrawal an amount equal to or greater than approximately $560,000 remains in bank account Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Category: Principal judgment Parties: A&D Beaumont Pty Ltd atf A&D Beaumont Family Trust (Plaintiff) Commonwealth Bank of Australia (Defendant) Representation: Counsel: B Mostafa (Plaintiff) Solicitors: O'Loughlin Westhoff (Plaintiff) File Number(s): 2023/201891 EX TEMPORE JUDGMENT (REVISED) 1. HIS HONOUR: The application before the Court is an application for preliminary discovery with a view to ascertaining the identity of an account holder with the Commonwealth Bank of Australia (Commonwealth Bank). A further aspect of the application before the Court is a form of restraining order directed to the Commonwealth Bank not to permit funds to be withdrawn from the account in question with the intent that the amount in issue, approximately $560,000, is retained in the account. 2. The plaintiff is a trustee of a family trust (trust). Digby Beaumont (Mr Beaumont) and his wife are directors of the trustee. The plaintiff proposed to invest funds in certain financial products dealt with by Apex Group Holdings (Australia) Pty Ltd or its related entities (Apex) in units (units) in a managed investment scheme known as L1 Capital Long Short Fund (the fund). 3. In early to mid-June 2022, an application form was completed. The amount to be invested was $500,000. The application form nominated bank account details for the trust and provided a BSB number and an account number. As later appears, the BSB number inserted on the application form was incorrect. 4. On or about 13 March 2023, the plaintiff sought to redeem the units and completed in handwriting a redemption form. The redemption form contained a section relating to the payment of the proceeds, approximately $560,000 (proceeds) and options as to whether the proceeds would be paid either into an account previously advised or alternatively into another account with provision for details to be provided of such other account. The redemption form, out of those alternatives, demonstrated that the first option had been selected, namely for the proceeds to be paid into an account previously advised. 5. On 14 March 2023, Mr Beaumont submitted the redemption form by email. Subsequently, he followed up what was happening in relation to the proceeds. 6. On or about 11 April 2023, Mr Beaumont, and indeed Apex, became aware that the monies had been paid into the wrong account by reason of the misstatement in the initial application form. On that date, Mr and Mrs Beaumont completed a change of details form to nominate the correct BSB number. However, the proceeds had already been paid into another account with the Commonwealth Bank. 7. Subsequently, between about 12 April 2023 and 9 June 2023, Mr Beaumont corresponded with Apex seeking updates in relation to efforts to recover the proceeds. 8. On 6 June 2023, Mr Beaumont expressed concern about the matter and raised the prospect of involving lawyers to assist him. 9. At or about this time, it is evident that there was concern regarding control of the monies and the risk that the monies were outside the control of Mr Beaumont, Apex and Australia and New Zealand Banking Group Limited (ANZ) (the bank for Apex). 10. On or about 13 June 2023, it became apparent that ANZ had previously instigated correspondence with the Commonwealth Bank and had been provided with some information. 11. On or about 19 June, Mr Beaumont further followed up the matter with Apex and others. 12. On 22 June 2023, a representative of Apex provided a further update to Mr Beaumont to the effect that the proceeds remained in what is described as the "Destination Account", but there were no further substantive updates as to the status of the money returns process. 13. On 23 June 2023, ANZ contacted Mr Beaumont though email. He became aware that the Commonwealth Bank had advised that they had been attempting to contact the customer in whose destination account the funds had gone, but still had not received any response from the customer. 14. On 23 June 2023, the plaintiff approached me as Duty Judge to seek short service of the summons on the Commonwealth Bank. I made directions for short service and directed that the summons be returnable at 10am today, 27 June 2023. 15. On 26 June 2023, there was correspondence as between the plaintiff's solicitor and legal counsel on behalf of the Commonwealth Bank, Mr Emmanuel Bell (Mr Bell). In the afternoon, there was a telephone conversation consequent upon a letter that had been sent by the plaintiff's solicitors to the bank. The plaintiff's solicitor sent the bank some proposed orders. 16. Later, Mr Bell, having had an opportunity to look at the materials, provided comments in relation to the proposed orders and suggested some amendments. The plaintiff's solicitors took that detail onboard and following a second call provided a revised set of proposed orders to Mr Bell. 17. Lastly, Mr Bell corresponded with the plaintiff's solicitor confirming a number of things. First, that the Commonwealth Bank neither consents nor opposes the orders contained in the revised set of short minutes of order. Secondly, that the Commonwealth Bank is unable to disclose the current balance of the CBA destination account. Thirdly, that the Commonwealth Bank did not intend to appear unless the Court required it to do so. 18. Mr Bell requested that he be provided with a sealed copy of the Court's orders (whatever they might be) once they were at hand and indicated that they would arrange for the responsive documents to be collated. The latter conversation between the plaintiff's solicitor and Mr Bell was in the following terms: [Mr Dziubinski, plaintiff's solicitor]: Actually, I'm just texting my barrister now about this and he points out I should ask you whether you can tell us whether the money is still in the bank account. Bell: I can't tell you that but let me have a think about what I can tell you. Well, let's just say a freezing order tomorrow is a good idea. 1. The application for preliminary discovery is made pursuant to r 5.2(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW). I am satisfied that the information is necessary in order for the plaintiff to form a view as to what if any action it has against the holder of the destination account. I am further satisfied that reasonable attempts have been made to obtain information and that the information has not been forthcoming. 2. Despite the initial mistake in the nomination of the BSB number in the application form, it seems to me evident that Mr Beaumont has done what he can to attempt to follow up those who may be able to assist him to recover the proceeds. I do not find that there is any inordinate or unacceptable delay by him approaching the Court in seeking the relief. 3. It is not clear what, if any, notification has been placed by the Commonwealth Bank on the account to alert the account holder to the receipt of funds, if indeed the Commonwealth Bank has any practice of making any such notification, about which there is no evidence. I consider there must be at least some risk that funds in excess of the amount paid in would be withdrawn from the account. 4. Further, the conversation between Mr Dziubinski and Mr Bell suggests that there is some risk of dissipation of funds. The plaintiff proffers to the Court an undertaking as to damages in relation to the restraining order sought. I am satisfied in the circumstances that a restraining order ought to be made. 5. The order sought in relation to preliminary discovery is a type of final order. The proposed restraining order is a type of interim relief sought to cover the period until the Commonwealth Bank may be able to provide the information sought by means of the order for preliminary discovery. 6. Counsel for the plaintiff, who has helpfully assisted the Court in his submissions in relation to the matter, and identifying the material aspects of it, indicates to the Court that he contemplates that after the short period of time that is envisaged under order 3(b) for provision of that material, that these particular proceedings may be able to be concluded, and that potentially any claim against the account holder of the destination account will be made in fresh proceedings. [Discussion regarding orders] 1. I have been informed by counsel for the plaintiff that the Commonwealth Bank has indicated that it expects to be able to respond within seven days. 2. In those circumstances, the orders of the Court are as follows: 1. Orders pursuant to r 5.2(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW) that by 4:00pm on 4 July 2023, the defendant make discovery to the plaintiff in relation to account number BSB 062 [XXX] Account number 20[XX] [XXXX] (Account) of: 1. any document recording the name of: 1. the holder or holders of the Account; and 2. the authorised operator(s) of the Account; during period 5 April 2023 to the date of these orders; 1. any document or record which shows: 1. the residential address(es) and mailing address(es) for the holder or holders of the Account and the authorised operator(s) of the Account; 2. contact phone number(s) for the holder or holders of the Account and the authorised operator(s) of the Account; 3. email address(es) for the holder or holders of the Account and the authorised operator(s) of the Account, during the period 5 April 2023 to the date of these orders; 1. Upon the plaintiff by its counsel giving to the Court the usual undertaking as to damages, orders pursuant to r 25.14(5) UCPR, or otherwise under the inherent jurisdiction of the Court, that the defendant must not permit funds to be withdrawn from the Account unless, following such withdrawal, there will remain in the Account funds equal to or greater than the value of AUD$559,698.93. 2. Orders that the preceding order lapse when the first in time of any of the following occurs: 1. the plaintiff gives the defendant notice in writing that the plaintiff no longer requires the defendant to comply with the order; 2. the expiry of the seventh day after the defendant gives the plaintiff all documents or records required by order 1; 3. the Court makes a further order inconsistent with the order. 1. Orders there be no order as to costs. 2. Stands matter over to 10 July 2023 at 10am before the Equity Duty Judge. 3. Orders that the parties and the account holder of the destination account have liberty to apply on 24 hours' notice. 4. Orders subject to any further order that the defendant take such steps as it may reasonably be able to do to place a notification on the account record of the holder of the destination account to alert the account holder to the terms of these orders. 5. Orders that these orders are to be entered forthwith. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 June 2023