Reported Decision : 57 ACSR 86 (2006) 24 ACLC 534 New South Wales Supreme Court CITATION : Bassoak v Rellgrove [2006] NSWSC 262 HEARING DATE(S) : 3 April 2006 JUDGMENT DATE : 5 April 2006 JURISDICTION : Equity JUDGMENT OF : Austin J DECISION : Order for issue of warrant under s 530C of the Corporations Act CATCHWORDS : CORPORATIONS - winding up - directors' failure to provide report as to affairs and access to company's books and information - whether contravention of ss 530A and 530B should lead to declarations of contravention or mandatory orders - requirements for issue of warrant under s 530C - form of warrant LEGISLATION CITED : Corporations Act 2001 (Cth) ss 530A, 530B, 530C Supreme Court (Corporations) Rules r 2.2 Australian Securities Commission v Samson (1997) 24 ACSR 555 Cvitanovic v Kenna & Brown Pty Ltd (1995) 18 ACSR 387 CASES CITED : House of Diamonds (NSW) Pty Ltd (in liq) v Memory Pty Ltd [2002] NSWSC 869 Morton v Robins (1996) 14 ACLC 1197 Re Rainbow Systems of Australia Pty Ltd; Wily v Parker (1996) 21 ACSR 171 Re Whitemore Holdings Pty Ltd (in liq) (Finn J, unreported, 23 June 2004) PARTIES : John Vouris as liquidator of Rellgrove Pty Ltd (A) Barry Francis Anstee, Mathew Anstee, Larissa Anstee and Mavis Lynette Anstee (R) FILE NUMBER(S) : SC 6139/05 COUNSEL : M J Cohen (A) SOLICITORS : Gadens Lawyers A) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION AUSTIN J WEDNESDAY 5 APRIL 2006 6139/05 BASSOAK PTY LTD (RECEIVERS AND MANAGERS APPOINTED) V RELLGROVE PTY LTD JUDGMENT (Revised 5 April 2006) 1 HIS HONOUR: By an application filed on 24 March 2006, made by interlocutory process in the winding up file, the liquidator of the defendant Rellgrove, John Vouris, has applied for relief of three kinds: (a) declarations that specified members of the Anstee family contravened provisions of either s 530A or s 530B of the Corporations Act; (b) orders that specified members of the Anstee family "suffer such penalty" arising from those breaches as the court in the exercise of its discretion would determine; (c) orders relating to the execution of a warrant under s 530C. 2 The application came before Gzell J as Equity Duty Judge on 24 March. Counsel for Mr Vouris submitted that the application for the issue of a warrant should be dealt with immediately on an ex parte basis, and the applications for other relief should abide the outcome of the execution of the warrant. 3 On the facts of this case, his Honour was not prepared to issue the warrant ex parte, although ex parte applications have succeeded on other facts. He granted leave for the interlocutory process to be filed in court, and ordered that it be returned instanter. He directed that the interlocutory process, the supporting affidavit by Mr Vouris made on 22 March 2006, the exhibit to the affidavit and his Honour's orders be served upon the four individuals against whom the interlocutory relief was directed. They are Barry Francis Anstee, Mathew Anstee, Larissa Anstee and Mavis Lynette Anstee ("the Anstee family"). He abridged the time for service of the documents to 12 noon on Saturday 26 March 2006, and stood the matter over to the Duty Judge at 10 a.m. on Monday 27 March. On 27 March the Equity Duty Judge, Nicholas J, made an order extending the time for service to 5 p.m. on 29 March, and stood the matter over to the Corporations List on Monday 3 April 2006. I heard the application on that day. 4 At the hearing of the application, counsel for Mr Vouris handed up some short minutes of orders, in which he sought some different relief, including a mandatory order that Barry and Mathew Anstee deliver up books of Rellgrove and provide specified financial information about the company within 7 days, and that they be required to file and serve affidavit evidence about their compliance with that order. 5 Affidavits were read satisfying me that the interlocutory process, Gzell J's order, the liquidator's affidavit and the exhibits to it were served on Barry, Mathew and Larissa Anstee. They were served with a covering letter from Mr Vouris' solicitors which sought an undertaking not to deal with the assets of Rellgrove and any assets purportedly held in trust by it, and any items listed in Exhibit JV31 to the liquidator's affidavit. No such undertaking has been given. Barry Anstee was served at 5:05 p.m. on 29 March. Mathew Anstee was served at 9:15 a.m. on 29 March. Larissa Anstee was served at 2:05 p.m. on 31 March. Barry Anstee was served slightly outside the revised service period, but in my view this has no material consequence, as he has had adequate time to respond to the interlocutory process. Mathew Anstee was served within the extended time. However, as counsel for Mr Vouris conceded at the hearing on 3 April, Larissa Anstee was not served soon enough to permit the court to deal with the application against her on the following business day. Mavis Lynette Anstee (called "Lynette Anstee" in the evidence) has not yet been served, and no application for relief was made against her at the hearing. 6 The matter was called outside court before the hearing began, and there was no appearance on behalf of any of the Anstee family. However counsel appeared for a company called Jamsapi Pty Ltd. The evidence reveals that Jamsapi is a company registered on 16 December 2005, the sole director and shareholder being Harold Thomas Lewis Berry. It appears that Mr Berry is the father-in-law of Barry Anstee. Jamsapi is the purchaser from Rellgrove of a property known as Hopewood Estate in Bowral, in circumstances discussed below. Mr Vouris' solicitor telephoned Stacks Taree and on 23 February 2006, and was told that Mr Berry had guaranteed the purchaser's performance under the sale contract. 7 In accordance with counsel's request, I dealt with the matter so far as it concerned Jamsapi and stood the remainder of the application down in the list, which was very busy. I granted leave to Jamsapi's counsel to be excused from further attendance at the hearing on that day. As far as Jamsapi was concerned, I merely noted its undertaking, until 18 April 2006, to refrain from disposing of any of the assets identified in Exhibit JV31 to Mr Vouris' affidavit and in a special condition in the contract for the sale of the Hopewood Estate. I stood the proceedings affecting Jamsapi over to the Corporations List on 18 April 2006. During the course of dealing with matters concerning Jamsapi, its counsel informed me that a solicitor called Kevin Rodgers was acting for Barry Anstee. But there was no appearance by that solicitor. 8 After I heard the application for relief against the Anstee family, I decided not to make the declaratory orders or orders for the imposition of a penalty, or the orders in the draft short minutes of order, but I decided it was appropriate to issue a warrant to Barry Anstee under s 530C. I delivered brief ex tempore reasons for judgment, and made orders for the issue of the warrant in terms of the interlocutory process. However, when I came to address the correct form of the warrant that evening, I was able to consider more fully the decided cases on s 530C and give the matter further thought. This has led to my preparing these fuller reasons for judgment with a view to making fresh orders, in substitution for my ex tempore reasons and Monday's orders. Declarations and penalties 9 The interlocutory process is structured so that declarations of contravention are followed by a determination of the imposition of a penalty. It is not clear to me that the court has any inherent power to impose a penalty not specifically provided for in the Corporations Act. Section 530A lays down a series of statutory duties for officers of the company after the court has made a winding up order or has appointed a provisional liquidator: to deliver up the company's books in the officer's possession; to provide information to the liquidator and attend meetings; to do whatever the liquidator reasonably requires to help in the winding up or in the performance of the provisional liquidator's functions; to provide his or her residential and work addresses. Then s 530A(6) provides that a person must not fail to comply with any of those duties. The offence established by subsection (6) is a strict liability offence, subject to the defendant establishing a reasonable excuse. According to Schedule 3 to the Act, the maximum penalty for contravention of subsection (6) is 50 penalty units or imprisonment for one year, or both. 10 Section 530B(1) says that a person is not entitled, as against the liquidator, to retain possession of books of the company or to claim or enforce a lien on such books. According to subsection (3), a person must not engage in conduct that results in the hindering or obstruction of the liquidator in obtaining possession of books. The liquidator has the statutory right under subsection (4) to give a person written notice requiring them to deliver up specified books that are in the person's possession, and under subsection (6) the person must comply with the liquidator's notice, failure to do so being a strict liability offence. The maximum penalty for contravention of subsection (3) or (6) is 50 penalty points or imprisonment for one year, or both. 11 Given the relatively comprehensive statutory provisions addressing the penal consequences of contravention, it is far from clear to me that the court has (or if it has, would ever exercise) any inherent jurisdiction over officers of the company in liquidation, or to which a provisional liquidator has been appointed, to impose some other discretionary penalty in civil proceedings. Sections 530A and 530B are not civil penalty provisions for the purposes of Pt 9.4B, and therefore the specific statutory regime that permits the court to make disqualification orders and pecuniary penalty orders, as well as compensation orders, is inapplicable. 12 A decision as to whether the court has any relevant jurisdiction to impose civil penalties could be made only after careful and complete examination of relevant authorities, a matter for which there has been insufficient time in the interlocutory circumstances. A decision to impose a penalty, if there is power to do so, would be made only after a final hearing, and probably only on the basis of a fully pleaded case. Counsel for Mr Vouris did not ask me to make any penalty orders at the hearing on 3 April. Instead, he submitted that the court should make the declarations of contravention set out in the interlocutory process, on the basis that questions of penalty would be addressed later. 13 I think it would be inappropriate to proceed in this way. A declaration of contravention of a provision of the Corporations Act is a serious step, which may have consequences for the affected party that are difficult to predict. It is in the nature of final relief. Although, technically, rule 2.2 of the Supreme Court (Corporations) Rules permits final relief to be sought by interlocutory process, one would normally expect and require that a claim for such declaratory relief be pleaded. There may also be a question as to whether such a declaration may or should be made in a civil proceeding, given that the contravention gives rise to a criminal offence and there is no express statutory authorisation to make a declaration of contravention such as is found in Pt 9.4B. It would be unwise, in the present interlocutory circumstances, to divorce the declarations from the penalty orders with which they are associated in the interlocutory process. Mandatory compliance orders 14 Counsel for Mr Vouris submitted that the court should make a mandatory order directing Barry and Mathew Anstee to deliver to Mr Vouris as liquidator of Rellgrove the company's books in their possession, and give him information about the location of the books, and give him information about Rellgrove's affairs as requested in Mr Vouris' letters of 5 and 12 December 2005. Those orders would track the statutory obligations in ss 530A(1)(a), 530A(1)(b) and 530A(2)(b). He also asked for an order that Barry and Mathew Anstee file and serve affidavit evidence of their compliance with the first order. 15 Orders of that kind are similar to Mareva orders, although Mareva orders are issued on a different jurisdictional basis. The court's general reluctance to make a mandatory civil order requiring compliance with a statutory provision, contravention of which is a criminal offence, seems to be overcome by s 1324(2), although that section was not invoked at the hearing on 3 April. Where a person has refused or failed to do an act or thing that the person is required by the Corporations Act to do, s 1324(2) permits the court on the application, inter alia, of a person whose interests have been, are or would be affected by the refusal of failure, to grant an injunction requiring the first-mentioned person to do that act or thing. It is at least arguable that the company in liquidation, and perhaps the liquidator, are persons whose interests are affected. An important issue is whether the company in liquidation or the liquidator should be required to give an undertaking as to damages, and if so, whether an adequate undertaking can be given. 16 Although such orders may well provide an appropriate response to problems of the kind disclosed in Mr Vouris' affidavit, in my view it would be inappropriate to make mandatory orders in circumstances where the respondents have received no notice that the orders would be sought, the interlocutory process did not seek that relief and the draft short minutes of the proposed orders have not been served on them. Warrant under s 530C 17 Section 530C provides: " (1) The Court may issue a warrant under subsection (2) if: (a) a company is being wound up or a provisional liquidator of the company is acting; and (b) on application by the liquidator or provisional liquidator, as the case may be, or by ASIC, the Court is satisfied that a person: (i) has concealed or removed property of the company with the result that the taking of the property into the custody or control of the liquidator or provisional liquidator will be prevented or delayed; or (ii) has concealed, destroyed or removed books of the company or is about to do so. (2) The warrant may authorise a specified person, with such help as is reasonably necessary: (a) to search for and seize property or books of the company in the possession of the person referred to in subsection (1); and (b) to deliver, as specified in the warrant, property or books seized under it. (3) In order to seize property or books under the warrant, the specified person may break open a building, room or receptacle where the property is or the books are, or where the person reasonably believes the property or books to be. (4) a person who has custody of property or a book because of the execution of the warrant must retain it until the Court makes an order for its disposal." 18 I have decided that it is appropriate to issue a warrant under s 530C directed to Barry Anstee, but not to any other member of the Anstee family, on the ground set out in s 530C(1)(b)(ii). To explain the basis of this decision, I must review the facts presented on the application. Facts 19 Mr Vouris was appointed provisional liquidator of Rellgrove by orders of Palmer J on 5 December 2005. Barrett J made an order for the winding up of Rellgrove and the appointment of Mr Vouris as its liquidator, on 12 December 2005. 20 Barry Anstee is the director of Rellgrove according to ASIC records. He was declared bankrupt on 28 July 2005, and his trustee in bankruptcy is Max Prentice. He is therefore disqualified from managing corporations: Corporations Act, s 206B(3). Mr Prentice gave notice of this ASIC on 6 December 2005. Mr Vouris' investigations have established that Mr Anstee was involved in the affairs of a number of related entities of Rellgrove, including Bassoak Pty Ltd (Receiver and Manager Appointed). Hopewood Estate 21 Rellgrove is the registered proprietor of the Hopewood Estate. Hopewood is an historical house built on a large property in Bowral, set in well maintained and ornate gardens. The property is held subject to three mortgages, namely a mortgage to Hocana Pty Ltd, a mortgage to Kevin Rodgers and Graeme Veitch (the partners of Brock Partners) and a mortgage to Taree Lands Pty Ltd. The mortgage to Hocana, dated 14 June 2002, is expressed to be for consideration of $2,600,000 and to be repayable on 14 June 2002. A notification of a charge over the business of Rellgrove, created on 14 June 2002 by deed of company charge securing the sum of $2,600,000, has been lodged with ASIC. 22 Annexed to Mr Vouris' affidavit is an extract of the evidence given by Barry Anstee on 30 January 2004, during his public examination by the Receiver and Manager of Bassoak under s 596A. Mr Anstee gave evidence that: (i) in 1999, Bassoak advanced approximately $1 million to Rellgrove which was paid into Rellgrove's bank account; (ii) Rellgrove purchased the Hopewood Estate in 1997; (iii) a trust deed was executed by Rellgrove declaring that it held the beneficial ownership of the Hopewood Estate on trust for Lynette Anstee; (iv) the trust deed and other documents were not produced when called for. 23 Barry Anstee applied to this court (proceeding No 5554 of 2003) seeking to set aside orders for production of documents that had been made against him, but he was unsuccessful except for some limitation of the period in which documents identified were to be produced. 24 Immediately upon his appointment as provisional liquidator, Mr Vouris began investigations into the mortgage financing of the company and a proposed sale of Hopewood Estate by the first mortgagee. He also took steps to enforce the statutory duties of the company's director. Failure to provide a report as to affairs 25 On 5 December 2005 Mr Vouris wrote to Barry Anstee in formal terms, requiring him to submit a report as to affairs, pursuant to s 475 of the Act. During a meeting the liquidator had with Barry, Lynette and Mathew Anstee at Hopewood Estate on 6 December 2005, Mr Vouris personally delivered a copy of his letter and enclosures to Barry and Mathew Anstee. According to his affidavit, Mr Vouris has not received a report as to affairs. He has notified ASIC of the failure to provide that document. Incorrect or undocumented information provided by Barry Anstee 26 At the meeting at Hopewood on 6 December 2005, Barry Anstee made statements to Mr Vouris to the following effect: (a) he resigned as a director of Rellgrove in July 2005 and Mathew Anstee was appointed as a director; (b) documents to record the change of director were signed and sent to Kevin Rodgers of Brock Partners, solicitors; (c) Rellgrove, the registered proprietor of Hopewood Estate, held the property in trust for Lynette Anstee, and Brock Partners held a copy of the trust deed and a transfer of registration of the property from Rellgrove to Lynette Anstee; (d) Rellgrove ceased trading in 2002; (e) Larissa Anstee conducted a business from Hopewood Estate trading as "Hopewood Estate"; (f) interest on the loan to Rellgrove had not been paid for 12 months; (g) all records were in storage and he would deliver them to Mr Vouris' office. 27 Mr Vouris wrote to Brock Partners on 6 December 2005, asking for copies of the notification of change of directors, trust deed and transfer of registration, and details of a mortgage that Brock Partners were said to have over Hopewood Estate. Brock Partners replied on 12 December, saying they were not given any form of notification of change of directors and were not able to provide copies of that document or any trust deed or transfer of registration. However, they enclosed a copy of a mortgage from Rellgrove to the partners of their firm, under which Rellgrove covenanted to pay on demand all legal fees incurred by Barry Anstee and related companies in respect of various legal proceedings. 28 Mr Vouris said that, after having conducted investigations, he was not able to find any documentary or other evidence that Barry Anstee had resigned as director of Rellgrove, or that Mathew Anstee had been appointed as a director, or that any documents recording the change in director had been signed or sent to Brock Partners. Nor had he been able to find evidence that Rellgrove, the registered proprietor of Hopewood, held the property in trust for Lynette Anstee, or that Rellgrove ceased trading in 2002, or that Larissa Anstee conducted a business from Hopewood. 29 Mr Vouris gave evidence that according to his investigations, until early January 2006 Rellgrove had been catering for wedding receptions, functions and conferences, and providing accommodation, at Hopewood Estate. He provided to the court a copy of part of the Hopewood Estate website which confirms those conclusions. Rellgrove is the proprietor of the trading names "Hopewood Estate" and "Hopewood Guesthouse Bowral". Bank statements for Rellgrove trading is Hopewood Estate for the period from April 2005 to 1 December 2005 contain entries for bookings for accommodation, weddings and reunions. 30 He received information from Mr Prentice, which suggests that Barry Anstee was at all times operating the business at Hopewood Estate, although the evidence is not conclusive as to the recent conduct of the business. It comprises statements by former employees about the central and dominant role played by Barry Anstee in the business. 31 Mr Vouris wrote again to Barry Anstee on 14 December 2005, after the winding up order and his appointment as liquidator of Rellgrove. He followed up the statements that Barry Anstee had made to him at their meeting on 6 December. He said he had evidence that Rellgrove had traded later than 2002, including the bank statements to which I have referred. He gave an account of what he had been told by Brock Partners. He said he would like to know who was in control of the company shortly before his appointment, whether the company's business had been transferred, and if so the name of the entity currently operating the business and how the transfer occurred. He asked for all relevant documentation and said he would be visiting the premises on 19 December to collect it. He asked for documentation of the ownership of the furniture and fittings presently in the premises. He said that if he did not receive sufficient documentation his intention was to close down the operations and remove Mr Anstee from the premises. 32 Mr Vouris has concluded, on the basis of these investigations, that no contemporaneous documents have been produced by Barry Anstee to support his assertions about the ownership of Hopewood Estate. He is concerned that the statements made by Barry Anstee on 6 December 2005 are unlikely to be true, having regard to what he was told by Brock Partners. He is also concerned about Mr Anstee's failure to provide a completed report as to affairs. He has reached the view that Barry Anstee's conduct discloses a predisposition to fail to observe and comply with his obligations as a director. I agree with Mr Vouris' conclusions on these matters. Sale of Hopewood Estate 33 On about 5 December 2005 Mr Prentice, the trustee in bankruptcy of Barry Anstee, told Mr Vouris that the mortgagee had exercised its power of sale over Hopewood and that the property was being advertised for public auction on 17 December 2005. On the afternoon of Friday 16 December 2005 he was informed by Ray Stack of Stacks Taree, the solicitor for Hocana, that his client had entered into a private sale and had cancelled the auction. He was informed that the purchaser was a company associated with Mr Anstee. 34 On 19 December 2005 Mr Vouris wrote to Stacks Taree requesting a copy of the sale agreement and details of the advances made to Hocana and Taree Lands, the first and third mortgagees respectively. On the same day he wrote to Barry and Mathew Anstee requesting information about how the funds raised on mortgage were used, and details of the purchaser of the property. He said he understood that the auction had been cancelled and the mortgagee had accepted an offer of $4 million. He has not received a reply to that letter. 35 On 21 December 2005 Mr Vouris wrote to Stacks Taree expressing his concern that the sale of the property had not been at arms length and asking for copies of valuations and correspondence. He did not receive copies of correspondence but he received a valuation by W McI Carpenter and Associates dated 12 December 2005 assessing the fair market value of the property as $4 million. 36 Mr Vouris' solicitors wrote to Mr Stack on 22 December 2005 saying that Mr Vouris was concerned that the mortgagee had not acted in good faith by entering into a private sale for a purchase price that barely covered monies owing, and asking for copies of documentation. The letter also asked for an undertaking by the selling mortgagee, Hocana, not to complete the transaction for a certain period. Stacks Taree replied on the same day denying the allegation that the mortgagee had not acted in good faith. In their letter they identified the purchaser as Jamsapi, and said that the price was the same as the valuation figure and was sufficient only to pay out the first mortgagee and partly pay out the second mortgagee (it later emerged, in a letter from Stacks to Mr Prentice dated 22 February 2006, that approximately $3,700,000 was owed to the first mortgagee and the second mortgagee would recover only a small amount). The letter supplied other information about the sale, and said that settlement was due on 1 March 2006. 37 The letter from Stacks enclosed a letter from Wingecarribee Shire Council indicating that the building was being used for wedding receptions and functions without prior development approval and renovations had been made without prior development consent, and the Council was taking legal proceedings. On 22 February 2006 Stacks Taree wrote to Mr Prentice providing information to him and saying that there was a potentially very serious problem with the sale, as the local Council had advised that they were instituting proceedings to shut down the wedding reception business. 38 Stacks wrote to Mr Vouris' solicitors on 1 March 2006, saying that settlement could be delayed for up to a month and if "the matter between yourself and Brock Partners" was not resolved before settlement, they would intend either to pay the money into trust or into the court until the matter was resolved. Later they confirmed that after Hocana received payment at settlement and discharged its mortgage, a discharge of the registered charge would also be available. Mr Vouris' solicitors wrote to Stacks on 15 March 2006 saying that they would send a representative to the settlement to collect a discharge of the charge. 39 Mr Vouris said in his affidavit that he is continuing his investigations into the sale to determine whether the first mortgagee has fulfilled the requirement to obtain market price for the property. It seems to me that, although the evidence is incomplete and inconclusive, there is a basis for Mr Vouris to pursue his investigations, especially given the identity of the purchaser and the relationship between Mr Berry and Barry Anstee. Purchase of furniture and antiques 40 Mr Vouris has obtained a bundle of tax invoices from Lawson Menzies, which identify items purchased by Rellgrove in the period from 8 March 2000 to 9 October 2002. The tax invoices are exhibited to his affidavit, as Exhibit JV31. Many items are listed, some of which appear to be quite valuable pieces of antique furniture. Mr Vouris has calculated that the total value of the items purchased from Lawson Menzies is $217,450.23. He has prepared a schedule showing that the invoices were paid from accounts in the name of Rellgrove. 41 In his affidavit, Mr Vouris sets out that evidence and concludes: "57. Upon my examination of these matters, having regard to my experience generally of the affairs of companies in liquidation and the conduct of directors of such companies in situations which are similar or analogous to the affairs of Rellgrove, and to the particular conduct of Mr Barry Anstee, Mr Mathew Anstee and Mrs Lynette Anstee in their dealings with me since the time of my appointment in December 2005, I believe it to be likely that: (a) all of the items purchased from Lawson Menzies were delivered to Hopewood Estate, Bowral; (b) some, if not all of the items are still at Hopewood Estate, Bowral; (c) by reason of the continuing conduct of Mr Barry Anstee, Mr Mathew Anstee and Mrs Lynette Anstee, there is a real and current basis for apprehending that, in the absence of urgent steps being undertaken, and should Mr Anstee or other members of his family become aware of the fact and substance of this application, Mr Anstee and his family are likely to endeavour to place assets of substantial value attributable to Rellgrove, beyond the reach of creditors of Rellgrove, or otherwise to alienate the movable property contained within the Hopewood Estate attributable to Rellgrove, with the aim of frustrating my administration of the liquidation of the company." I accept this evidence. Conditions for the issue of a warrant under s 530C 42 Under s 530C(1) where a company is being wound up the court may issue a warrant on the application of the liquidator if it is satisfied either that: (i) the person has concealed or removed property of the company with the result that the taking of the property into the custody or control of the liquidator will be prevented or delayed; or (ii) a person has concealed, destroyed or removed books of the company or is about to do so. 43 The wording of subsection (1) makes it plain that if the court intends to issue a warrant under subparagraph (i), it must be satisfied that concealment or removal of property of the company has already occurred. It is not enough, in the case of property of the company as opposed to books of the company, for the court to be satisfied that the person is about to conceal or remove the property. 44 Assuming that "property of the company" ("property" being an expression defined in s 9) includes real property and that a person can "conceal" or "remove" real property, the evidence does not enable me to be satisfied that at the present time, any concealment or removal of Hopewood Estate has occurred. There is a contract for the sale of Hopewood Estate to a company that has some family connection with Barry Anstee, but the contract has not yet been completed and the liquidator is aware of it. 45 As to the furniture and other items in Exhibit JV31, on a close reading of para 57 of Mr Vouris' affidavit, his evidence is inconsistent with the proposition that any concealment or removal of that property has yet occurred. His concern is that there is a "real and current basis for apprehending, in the absence of urgent steps being undertaken", that Barry Anstee and his family are likely to put assets of Rellgrove beyond the reach of its creditors or otherwise alienate them. I cannot, in the face of that evidence, conclude that at the present time Barry Anstee or anyone else has (already) concealed or removed that property of the company. 46 The books of Rellgrove are in a different position. The relevant evidence includes the following: · Barry Anstee is an undischarged bankrupt and as such, disqualified from managing corporations; · he has not submitted a report as to affairs as required by Mr Vouris; · he has said that all records are in storage and that he would deliver them to Mr Vouris but he has not done so; · he has made an incorrect statement that a document recording a change in directorship was sent to a solicitor; · he has not produced documentation for the alleged trust of the company's land or for the claim that the company ceased trading in 2002, and the latter claim seems contrary to other evidence; · he has not replied to correspondence from Mr Vouris, namely the letters of 5 and 14 December 2005. 47 On the basis of the evidence presented by Mr Vouris, including the matters just listed, I am satisfied that Barry Anstee has concealed, destroyed or removed books of Rellgrove or is about to do so. Therefore the foundation for issuing a warrant to him has been established. 48 Section 530C(2) says that the warrant may authorise the specified person (in this case, Mr Vouris) to search for and seize "property or books" and to deliver "property or books". The intention seems to be that if the court is satisfied of the matter in subparagraph (ii) of subsection (1) it will issue a warrant with respect to the books of the company, but it is not authorised to extend the warrant to property of the company unless it is satisfied, in respect of that property, of the matter in subparagraph (i). Here, since I am satisfied with respect to the company's books but not with respect to any property of the company, the warrant will have to be confined to the books of the company, although it will extend to the books of the company as defined in s 9 without limitation. The court's discretion 49 Once the conditions for the exercise of the court's power to issue a warrant have been established, the court has a discretion whether to issue the warrant or decline to do so. In my opinion, this is a clear case. I respectfully agree with the observation of Young J (as the Chief Judge in Equity then was) in Cvitanovic v Kenna & Brown Pty Ltd (1995) 18 ACSR 387, 389, that the warrant procedure is available only where it is necessary to take an extreme step in order to administer the company. This is an extreme case, where an undischarged bankrupt has failed to comply with the requirements of the liquidator and has failed to provide information essential for the liquidator's proper administration of the winding up for the benefit of the company's creditors. 50 It follows that I am prepared to issue a warrant against Barry Anstee in terms of s 530C with respect to all of the books of Rellgrove. It is not necessary, under the section, to limit the warrant to execution at a particular place, although the warrant will permit Mr Vouris to search Hopewood Estate for the books. In para 58 of his affidavit, Mr Vouris said he sought the issue of a warrant for the purpose of searching for and seizing the items appearing in Exhibit JV31, that is the furniture and other goods, not the books. But the form of warrant presented in the application would extend to books as well. I therefore assume that Mr Vouris would see some point in obtaining and executing a warrant confined to books. 51 In these Cvitanovic case Young J drew an analogy between the warrant authorised by s 530C and the Anton Pillar procedure, and also search warrants issued under New South Wales legislation. In light of that analogy, he decided to impose some conditions upon the grant of the warrant, which are adequately summarised in the ACSR headnote to the case as follows: "(i) the warrant must be issued to a specific person, who must be named, and the warrant can use the words 'with such help as is reasonably necessary'; (ii) the warrant should note that before the warrant is executed the specified person shall announce on the property that he or she is there to execute the warrant; (iii) the warrant is not to be executed less than one hour after the announcement and the occupants must be given the opportunity of voluntarily handing to the specified person all the documents referred to in the warrant; (iv) the period of one hour should also be available for the occupants to seek legal advice and to facilitate this the specified person is to be accompanied by a solicitor employed independently of the liquidator; (i) the specified person is to be accompanied by no more than 2 or 3 other persons, other than the independent solicitor and the person named in the warrant; (vi) all searches should be carried out, if at all possible, in the presence of an occupant of the premises; (vii) a list is to be made of all the documents that are removed and a copy of the list is to be given to an occupant of the premises over the age of 18 years; (viii) the specified person is not to go onto the premises before 8 a.m., nor execute the warrant after 6 p.m.; (ix) if no one is in attendance when the specified person first calls, then the warrant is not to be executed until an occupant comes onto the property; if, on a second occasion, the specified person calls and there is no one present on the property the warrant may be executed; (x) the liquidator must give to the court a personal undertaking to be responsible for any damage or loss occasioned by any person as a result of the execution of the warrant or, alternatively, a bank guarantee in the sum of, at least, $50,000 as security for the loss sustained by any person must be lodged with Registrar." 52 There is a line of cases in the Federal Court of Australia in which a different approach has been taken. They begin with Morton v Robins (1996) 14 ACLC 1197 (Northrop J), and include Australian Securities Commission v Samson (1997) 24 ACSR 555 (Goldberg J) and Re Whitemore Holdings Pty Ltd (in liq) (Finn J, unreported, 23 June 2004). The attitude in the Federal Court is partly driven by a constitutional concern not applicable, or at least not applicable in the same way, in a State Supreme Court, as Young J pointed out in Re Rainbow Systems of Australia Pty Ltd; Wily v Parker (1996) 21 ACSR 171. 53 In Rainbow Systems his Honour adhered to the view he expressed in Cvitanovic, notwithstanding Morton v Robins. In House of Diamonds (NSW) Pty Ltd (in liq) v Memory Pty Ltd [2002] NSWSC 869, at [3], Hamilton J in this Court followed the views of Young CJ in Eq having regard to "the serious inroads into rights of private property potentially involved, combined with the fact that, although liquidators are in a sense officers of the Court, they do not have the training and discipline possessed by police forces or other law enforcement agencies, which are normally the people who execute search warrants". 54 It is unnecessary for me to choose between these two lines of cases in the present circumstances. Here the liquidator has voluntarily offered, in para 59 of his affidavit, to attend Hopewood Estate with an independent solicitor and a representative of a valuer. Given that the warrant will not extend to goods, the presence of the valuer seems unnecessary, but the presence of an independent solicitor is offered. Mr Vouris says he will cause the solicitor to prepare a report, and he will then swear and file a further affidavit. 55 I take the view that some of the matters listed in the headnote to Cvitanovic are matters of prudent good sense with respect to the execution of a warrant under s 530C, and need not in every case be incorporated as conditions or terms of the warrant. I think that applies to (ii), (iii), (iv), (v), (vi), (vii) (viii), and (ix). However, where the warrant is confined to the books of the company, it seems to me that the special precautions in (ix) are not necessary. It is clear that (i) is a requirement. 56 Although there are circumstances (such as those in Cvitanovic) where a personal undertaking as to damages would be appropriate, in the present case I shall not require such an undertaking, having regard to all the facts, including the fact that the registered proprietor of Hopewood Estate is Rellgrove and the fact that the warrant will be confined to books. 57 I shall direct Mr Vouris to prepare short minutes of order and a form of warrant reflecting these reasons. ********** 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.