Cope v Destination Education Pty. Ltd. & Ors [1999] NSWSC 6

New South Wales Supreme Court CITATION : Cope v Destination Education Pty. Ltd. & Ors [1999] NSWSC 6 CURRENT JURISDICTION : FILE NUMBER(S) : 5077/98 HEARING DATE(S) : 12/01/99 JUDGMENT DATE : 12 January 1999

Bradley Eric Cope (Plaintiff) PARTIES : Destination Education Pty. Limited (First Defendant) Eric William Cope (Second Defendant) Stephen Joseph Roney (Third Defendant) JUDGMENT OF : Windeyer J at 1

COUNSEL : Robert James Bromwich (Plaintiff) ex parte SOLICITORS : Conway Leather Shaw (Plaintiff) ex parte CATCHWORDS : DECISION : Application for exparte injunctive relief refused

JUDGMENT 1 HIS HONOUR: By summons dated 21 December 1998, the plaintiff sought orders claiming relief in various alternative ways appropriate to relief which would be ordered in oppression proceedings if successful. 2 No affidavit evidence was filed with the summons. Affidavits have now been filed proving service of the summons on the three defendants: the first defendant being the company in which the plaintiff holds a 45 per cent interest; the second defendant being the father of the plaintiff who also holds a 45 per cent shareholding in the first defendant; and the third defendant being the holder of the remaining 10 per cent of these shares. 3 By Notice of Motion filed in court this afternoon and which I allowed to be returnable immediately, the plaintiff seeks orders in the nature of Mareva injunctions restraining the defendants, but presumably meaning the second and third defendants, from operating on the bank accounts of the first defendant, subject to certain provisions enabling particular payments to be made. 4 These orders are sought ex parte so that the Notice of Motion has not been served and no notice of it has been given to the defendants. 5 In an affidavit sworn today, the plaintiff has stated that the arrangement he made with his father in 1993 was that he would take a 50 per cent share of the business that when Mr Roney, the third defendant, came into it both he and his father give up a 5 per cent interest; that Mr Roney was to bring or arrange to be brought to the company certain funds but this did not occur; that the company obtained funds by reason of some fraudulent claims on the Export Market Development Grants Authority; that he has been removed as a director of the company; that there is an impasse in the conduct of its affairs in that he, with a 45 per cent interest, has no way of obtaining any control over the conduct of the company's affairs as the second and third defendants are taking no account of his wishes. 6 All these matters may be relevant to the question of whether or not the company should be wound up, or whether some compulsory buy out orders ought to be made, or other relief obtained by the plaintiff. The question, however, on this Notice of Motion is whether or not the orders sought should be made. 7 For them to be made without notice, the court would need to be satisfied, first, that the plaintiff's claim had at least a reasonable chance of success, and secondly that there was some danger of the assets of the first defendant being dealt with not in the interests of the shareholders or those assets taken beyond the jurisdiction or in some way outside the control of the court. 8 As I understand it, the basis on which it is said that there is this risk is that the second and third defendants are said to have engaged in this fraudulent conduct. It is important to point out that they have not been given any opportunity to respond to the allegations made against them, and that the offences if made out would be serious and would make the second and third defendants liable to severe penalties including imprisonment. It follows it is said that they may therefore attempt to abscond from the jurisdiction taking the moneys of the first defendant with them, making the plaintiff's claim to secure his interest in the company useless. 9 In my view, the grounds on which a Mareva injunction would be granted have not been made out. It is just speculation at this stage that two persons whose roots are apparently in Australia will attempt to leave Australia if they become aware of the enquiry which has been put in place by the plaintiff or put in place as a result of information given by the plaintiff to the relevant authorities. In the same way it is just speculation that they would endeavour to take from the company the company's moneys if they are informed of the actions taken by the plaintiff. 10 The effect of the injunctions could be serious so far as the first defendant is concerned, but in any event, in my view the grounds on which the orders sought might possibly be made have not been made out and therefore the Notice of Motion should be dismissed. 11 The plaintiff may wish to give consideration to seeking the appointment of a receiver or a provisional liquidator for the company but that is entirely a matter for him and I am not to be taken as suggesting that this is necessarily the appropriate course. 12 If the plaintiff wishes, then I am prepared to stand the Notice of Motion over for hearing on notice, but the application for the orders in the Notice of Motion to be made ex parte is dismissed. 13 Order the return date of the summons be amended to 8 February 1999.